0:01 AM, 27th June 2025, About 7 months ago
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Houses of multiple occupancy (HMOs) in England are selling for significantly higher prices than standard homes, offering substantial profits for investors, research reveals.
The findings from investment firm Excellion Capital, show that HMOs command an average sale price of £334,260, a 13.1% premium over the national average house price of £295,654.
The higher value stems from the robust income potential of HMOs, generating yields as high as 12.5%, which is much more than typical rental returns.
This helps make licensed HMOs a compelling choice for investors wanting consistent revenue streams.
The firm’s vice president of real estate, Robert Sadler, said: “This research shows that investors who wish to buy a property, carry out the necessary conversion work, and then sell it on can also consider the sector to be one of plentiful returns.
“This is a tremendous value add over what can be a very short period of time.”
He says that investors who retain the asset will benefit from the 12.5% yield and from reliable capital appreciation over the years before selling.
In some cities, the price premium for HMOs is even more pronounced and Newcastle leads with an average HMO sale price of £315,890.
That’s an impressive 49.6% above the city’s general house price of £211,160.
Nottingham follows closely, with HMOs selling for £282,942, a 45.5% premium over the local average.
Other cities with notable premiums include Liverpool (39.9%), Birmingham (36.4%), Bristol (30%), Bradford (29.6%) and Sheffield (28.1%).
London has a 26.4% premium, and other best performing cities include Leicester (23.1%), Manchester (22.7%), Leeds (16.9%) and Brighton (8.8%).
A key factor driving these premiums is the requirement for a dedicated HMO licence in England and Wales.
Properties sold with an existing licence are particularly valuable, as they are ready to generate income immediately.
The firm says that even expired licences can streamline the process of obtaining a new one, enhancing a property’s appeal.
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