Where landlords struggle with low yields revealed
8 months ago
HMO landlords earn twice as much as non-HMO landlords
12:01 AM, 3rd September 2025, 8 months ago
6
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HMO landlords are reaping an average gross annual income of £120,283, nearly double the £61,846 earned by their non-HMO counterparts over the past year, research reveals.
The study by Aldermore reveals that HMO landlords dominate the upper echelons of rental income.
It found that 30% of HMO landlords reported gross earnings of between £100,000 and £199,999, compared to just 10% of non-HMO landlords.
For incomes of more than £200,000, 13% of HMO landlords fell into this category, while only 5% of non-HMO landlords achieved similar results.
HMO landlords have better yields
The lender’s director of mortgages, Jon Cooper, said: “Whilst it’s common knowledge that HMO landlords tend to benefit from enhanced annual incomes and greater yields, the difference in scale here is major.
“The numbers here are a timely reminder of how attractive HMOs can be as an asset class for many landlords across the country.”
He added: “While no housing option is without its trade-offs, our data suggests that HMOs are defying outdated perceptions and offering a more affordable and rewarding experience for many students and presenting a compelling financial opportunity for landlords.
“With the right management and attention to quality, landlords can enjoy reliable returns while offering affordable, socially enriching homes that truly make a difference to student life.”
Uni students benefit too
HMOs also offer notable advantages for tenants, particularly university students with students in HMOs paying around £600 per month.
They are saving nearly £200 compared to the £791 paid by those in other private rentals.
Also, 74% of HMO tenants report that their living arrangements fostered greater social interaction.
Tags:
Aldermore research, HMO advantages, HMO landlords, landlord income, landlord returns, Property investment, Rental yields, Student accommodation, Student Housing, UK rental market
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Member Since May 2024 - Comments: 11
10:16 AM, 3rd September 2025, About 8 months ago
Sadly, many comparisons using statistics of this nature give an inaccurate picture.
Are we comparing like for like? Are the high incomes truly reflective of an average-sized HMO?
Do these figures also incude the likes of Serco who have excessive funds for housing immigrants at highly inflated rates?
Member Since October 2013 - Comments: 1310 - Articles: 10
10:23 AM, 3rd September 2025, About 8 months ago
Completely misleading nonsense!
Of course the GROSS income from HMOs is more, but there are multiple extra costs, extra regulation, extra risks, and increased workload to manage those properties.
The bottom line is the NET income from HMOs as compared to comparable properties not used as a HMO, then work out whether the risks and extra work involved in running a HMO is worth the extra income (the difference in the NET income from a HMO property compared to the non-HMO property).
GROSS incomes are meaningless, it is only the NET income that is the true comparator.
Member Since August 2016 - Comments: 1190
10:34 AM, 3rd September 2025, About 8 months ago
I wouldn’t want to be running an HMO when the Renters Rights Act becomes law.
Member Since October 2020 - Comments: 1174
12:08 PM, 3rd September 2025, About 8 months ago
The only figure that forms a useful comparison between HMOs and single lets is total return on investment. There are lots of hidden costs with HMOs that other comparisons fail to consider, such as additional winding down costs when you have just one tenant left and want to sell.
Member Since August 2017 - Comments: 22
12:30 PM, 3rd September 2025, About 8 months ago
IMHO HMOs are NO-GOs under RRA rules. HM GOV will see the end of us decent landlords. RIP, folks.
Member Since January 2018 - Comments: 42
3:27 PM, 4th September 2025, About 8 months ago
As they always say turnover is not leftover