HMOs generate £1.4bn in rent every month

The financial size of the shared living sector in England and Wales has been revealed, with research highlighting that it generates around £1.4 billion in rent every month.

This vibrant market, driven by nearly 400,000 licensed Houses in Multiple Occupation (HMOs), showcases the growing appeal of communal living.

The findings from HMO management platform, COHO, highlights that the average monthly rent for a room in a shared property stands at £711.

For a typical five-bedroom HMO, this translates to £3,557 per property each month.

HMO housing heavyweight

The firm’s chief executive and founder, Vann Vogstad, said: “The numbers speak for themselves: over £1.4bn in monthly rental income from nearly 400,000 licenced HMOs across England and Wales the shared living sector is a housing market heavyweight.

“What was once seen as the preserve of students and transient renters has evolved into one of the most lucrative and dynamic sectors of the UK market.

“This evolution is being driven by a new generation of renters, most notably young professionals at the beginning of their careers who are showing a great appetite for the social and community benefits provided by shared living, while also craving a high quality, sophisticated home.”

He added: “As the shared living demographic broadens and becomes more discerning, the sector’s revenue potential goes through the roof.”

HMO financial impact

With 394,945 licensed HMOs nationwide, the sector’s economic impact is undeniable, and making a huge contributing to the UK’s housing landscape.

London dominates as the powerhouse of the HMO market, generating £918.4 million every month.

The South East follows with £140.5 million, while the South West, North West and Yorkshire and Humber contribute £106.8 million, £60 million and £56.4 million, respectively.

Among the most profitable postcode areas, London’s NW1 reigns supreme, boasting 9,681 shared properties with an average room rent of £1,220, yielding more than £59 million every month.

The busiest HMO postcode

Coho also found that East London’s E5 is the nation’s busiest HMO postcode which is home to 12,061 licensed properties.

They generate £57.2 million each month at an average room rent of £949.

Other notable London postcodes include SE1 (£42.7 million), N15 (£37.3 million), IG1 (£36.1 million), EN3 (£30 million), N17 (£28.5 million) and IG3 (£27.6 million).

Beyond the capital, Bristol’s BS16 postcode leads with 6,908 shared properties, amassing more than £25 million every month.

Other high-performing non-London areas include York’s YO10 (£10.6 million), Brighton’s BN2 (£8.7 million) and Bath’s BA2 (£8.5 million).

Cardiff’s CF24 (£8.2 million) is also a top performer, as is Oxford’s OX4 (£6.8 million), Leeds’ LS6 (£6.4 million) and Manchester’s M14 (£5.7 million).