The average cost of converting a standard three or four-bedroom property into a six-bedroom house in multiple occupation (HMO) is £68,067, according to recent research conducted by Excellion Capital.

With the average purchase price for a three or four-bedroom property in England currently at £444,273, the total initial investment required—including conversion—stands at approximately £512,340.

Once converted, the average HMO in England generates £711 in monthly rent per room, equating to £4,269 for a fully let six-bedroom property. This results in an average gross yield of 10%, notably higher than the typical 5–6% yields found in the broader residential market.

Regional differences remain significant. The highest average yields are seen in the North East at 12.5%, followed by the North West at 11.5%, and Yorkshire and the Humber at 11%. In contrast, London records the lowest average yield at 6.6%, while the South East returns 8.1%.

In specific urban markets, yields remain strong. Manchester reports an average gross yield of 12.2%, with an average resale price of £329,163 and monthly rental income of £4,050. Newcastle achieves an average yield of 11.9%, while Birmingham averages 10.6%.

Excellion Capital notes that the cost of conversion varies depending on the condition of the property. Minor cosmetic works and compliance upgrades for HMO licensing are significantly less expensive than more substantial refurbishments, which may include damp treatment or the installation of new kitchens and bathrooms.

Robert Sadler, vice president of real estate at Excellion Capital, commented: “We are seeing a lot of property investors in the residential space turn their attention to the bustling HMO market, especially in the regions.

“Particularly outside of London and our other major cities, investors are snapping up relatively cheap three or four-bed terraced homes and converting them to six-bed HMOs with extraordinary results when it comes to returns and yields.”

Sadler also outlined the advantages of HMO financing: “HMOs, with a few exceptions, are very popular with lenders. Because the required conversion works tend to be relatively light, investors can usually fund both the acquisition and the works with a bridge loan.

“This is ideal as bridge loans complete much faster than development loans and require much less oversight by the lender.”

He continued: “Another advantage is that lenders provide very high leverage on HMO bridge loans (75% against the purchase price plus 100% of costs).

“This means that the upfront equity requirement for the investor can actually be quite low compared to other investments.

“It is important here to choose a lender that will measure the loan against the income producing value rather than the vacant value as this can make a big difference to the final loan amount.”

Regarding longer-term financing, Sadler added: “Once the conversion is complete, the investor can repay the loan with very favourable investment finance (best rates below 6% fixed). Finally, if the investor can buy portfolios of HMOs and get to a loan amount of £1m or above, they can usually obtain better pricing from lenders. Large portfolios of retained HMOs can create a lucrative long-term income for investors.”

The issuing of new House in Multiple Occupation (HMO) licences by planning authorities across Great Britain saw a notable contraction last year, according to new internal figures released by Searchland. In total, 23,947 licences were granted in 2024—a figure that marks a drop of 1,498 from the 25,445 licences recorded in 2023. This represents a 5.9% year-on-year decrease.

But the story isn’t one of uniform decline. In fact, some local authorities are bucking the trend in dramatic fashion.

Looking at Oxford, for example. In what can only be described as a surge, the city saw the approval of 1,823 new HMO licences in 2024—an astonishing 1,341 more than the prior year. Elsewhere, the momentum continued: Bristol issued 838 more licences than it had in 2023; Lambeth increased its count by 759; Hammersmith & Fulham added another 544 to its tally; and Charnwood, a perhaps less-expected entrant, saw an uptick of 533.

And regarding Lambeth—it didn't just see growth, it led the nation. The borough emerged as the frontrunner for new HMO approvals, with 2,515 licences handed out in 2024. That figure alone constituted a striking 10.5% of all such licences issued nationwide.

Oxford, with its aforementioned boom, secured 1,823 approvals, while Bristol clocked in at 1,588. Several other local authorities crossed the four-digit threshold as well, including Haringey (1,158), Southwark (1,087), and Hammersmith & Fulham (1,007).

Reflecting on the broader implications of this decline, Hugh Gibbs, co-founder of Searchland, remarked: “There’s been a decline in the annual number of HMO licenses being granted by councils across Britain at a time when we arguably need more rental accommodation to ease the high demand from tenants."

He continued, offering insight into what might be fuelling the pullback: “This reduction has no doubt been driven by a greater reluctance from councils due to a move towards risk-based licensing, but it’s also fair to say that tighter regulations, particularly with regard to mandatory room sizes, may have also deterred investment.”

Yet, amid this overall downturn, regional outliers are emerging, defying the national slump. Gibbs added: “However, not every area has seen a decline and, in fact, many regional hotspots such as Oxford, Bristol and London have seen a substantial increase.”

While the national trajectory suggests caution or constraint—possibly a policy-induced pause—the localised upticks in key urban areas hint at a more complex, geographically uneven landscape for rental housing development across Britain.

The London rental market shows signs of greater balance, Foxtons reports, with supply improving and demand easing amid ongoing economic uncertainty. According to the agency’s latest data, new rental listings rose by 5% in April compared to the previous month, helping to alleviate pressure in areas that have experienced sustained demand in recent years.

At the same time, applicant registrations fell 3% month on month and are down 5% year to date versus 2024. While Central London continues to show relative strength, South and West London have recorded more pronounced drops in demand. The average number of applicants per instruction declined to 12.4 in April, representing a 1.7% fall from March and a 14.3% year-on-year decrease. This points to reduced competition in some areas.

Average weekly rents increased by 3% year on year, reaching £589. The rise was supported by consistent demand and a stronger supply of available properties. South and West London recorded the highest regional rent growth at 4% each. Foxtons also noted a slight decline in the proportion of budget renters are spending. On average, tenants are now using 96% of their budgets, and 64% of applicants secured homes below their maximum affordability—suggesting more cautious spending behaviour.

Gareth Atkins, managing director of lettings at Foxtons, said: “April’s rental market activity reflects a more balanced landscape for renters and landlords alike. A 5% rise in new property listings has helped ease some of the pressure seen in recent years, giving renters greater choice and more room to negotiate.

“The slight slowdown in applicant registrations – down 3% month on month – also indicates a shift in pace, which is typical of a market moving toward greater stability. This trend, alongside a dip in the average percentage of budget spent, shows the market is becoming less competitive and more accessible for many.”

Average applicant budgets rose 2% compared to the same period last year, reflecting continued confidence among renters. Demand increased for one-, two-, and three-bedroom properties, while budgets for studios fell by 15%, indicating a shift in preference toward larger living spaces.

Regionally, the data reveals a mixed picture. Central London saw a 7% increase in renter registrations, despite a small decline in supply. In contrast, South and West London experienced significant reductions in demand, falling by 19% and 24%, respectively.

2024 saw a significant rise in consumer engagement with The Property Ombudsman, making 73,035 contacts over the course of the year. This marks a 27% year-on-year increase and points to a growing reliance on the redress scheme, as legislative developments and operational challenges continue to shape the UK property landscape.

Residential lettings remained the area with the highest volume of complaints. Of the 13,516 enquiries received in this category, 7,823 related specifically to tenant issues, including disputes over repairs, deposits, and the handling of complaints. In total, £1.49 million was awarded to consumers, with 71% of formally investigated cases decided in their favour. The service resolved 4,980 cases through early resolution or formal investigation.

Lesley Horton, interim property ombudsman, commented: “We are continuing to see increased demand for our service, especially in the private rented and leasehold sectors. Renters and leaseholders have often had problems for months, sometimes years, and access our service when previous attempts to resolve issues have failed. We see this reflected in the complexity of our casework, which is at historic highs.”

She added: “There is going to be continued change in the property sector, and we will work to support the success of any reforms, improve best practice in the sector and most importantly, help consumers to navigate and resolve their disputes.”

In the residential sales sector, enquiries commonly involved issues related to seller conduct. A total of £797,031 was awarded in sales-related cases, with an average award of £561. The Ombudsman has indicated that market conditions, coupled with the end of the stamp duty holiday in April, may lead to an increase in complaints in 2025.

Within the lettings sector, £511,583 was awarded to consumers. Of those submitting complaints, 49% were tenants and 47% were landlords, highlighting the broad range of issues affecting both parties. Since 2015, total compensation awarded to consumers has risen by 84%.

TPO remains the UK’s largest Government-approved redress scheme serving the private property sector. It currently oversees 19,495 registered property offices and branches, providing a total of 39,404 services. It continues to be the only approved ombudsman for the private rented sector.

The National Residential Landlords Association (NRLA) has issued a stark admonition to the Government, accusing it of failing to confront the dismal realities plaguing the court system in the wake of the impending abolition of Section 21 ‘no-fault’ evictions.

According to data released by the Ministry of Justice, landlords seeking to reclaim possession of their properties via legal channels faced an average wait exceeding seven months in the first quarter of 2025. This marks a deterioration from the same period the previous year, with the average time escalating from 29.8 weeks to 32.5 weeks—an upward drift that underscores systemic inertia.

Despite ministerial assurances that the judiciary will be adequately prepared to manage the caseloads brought on by the Renters’ Rights Bill, the NRLA emphatically disputes this optimism. With Section 21 on its way out, landlords will be wholly dependent on the efficiency of the courts to handle possession claims—an unsettling prospect given current delays.

In a recent Committee Stage discussion on the Renters’ Rights Bill in the House of Lords, Housing Minister Baroness Taylor asserted that possession proceedings typically take eight weeks. However, the NRLA swiftly clarified that this timeframe merely encompasses the interval between filing a claim and receiving a possession order.

Crucially, it excludes the full duration required to actually regain control of the property—often stretching beyond six months.

The association’s concerns are not unfounded. Findings from its Autumn 2024 survey, which gathered responses from over 1,400 landlords, reveal that an overwhelming 96% harbour minimal to no confidence in the court system’s capacity to handle the increased burden once the Bill becomes law.

In response, the NRLA has demanded that the Government articulate a transparent and comprehensive strategy for overhauling the courts. Such a plan, they argue, should encompass explicit benchmarks for "court readiness," dedicated funding to expedite case processing, and routine public reporting on judicial performance metrics.

Ben Beadle, Chief Executive Officer of the NRLA, was unequivocal in his criticism: “Ministers are either unaware of the true state of the courts or are refusing to admit it. Their claims that the courts will be ‘ready’ for the impact of the Renters’ Rights Bill simply do not stack up. Seven months is an eternity for responsible landlords who may be dealing with serious rent arrears and for neighbours having to endure anti-social behaviour.”

In a further rebuke, Beadle added: “The government must stop burying its head in the sand and commit to a fully funded, detailed and deliverable plan to ensure the courts are fit for purpose. Without this, landlord confidence will continue to erode, undermining investment in supplying the rental homes that tenants desperately need.”

In summary, while legislative reforms press forward, the operational machinery required to enforce them appears distressingly unprepared—leaving landlords, tenants, and communities suspended in a climate of uncertainty and delayed justice.

Older and disabled renters are facing increasing difficulty securing appropriate accommodation in the private rented sector (PRS), with new research from Propertymark highlighting a significant shortage of bungalows across the UK.

The report reveals that nearly 867,000 households headed by individuals aged 55 and over are now renting privately. Since 2010/11, the number of older renters in this category has risen by 70%, reflecting a notable demographic shift in the rental market.

The research also indicates that almost half of private renters aged 65 or above fall within the lowest 20% of household incomes, raising concerns about their ability to afford and access suitable housing.

At the same time, availability of bungalows in the PRS is declining. Propertymark data shows a year-on-year fall of nearly 5%, equating to approximately 1,000 fewer bungalows available to rent. From April 2024 to April 2025, the total number of rental bungalows dropped to 19,161, down from 20,138 in the previous year.

Regional data from April 2025 demonstrates wide variation in availability. The West Midlands listed 110 rental bungalows, Scotland had 66, and Northern Ireland had 35. In contrast, the East of England and South East had 298 and 284 respectively.

The South West, despite being a key destination for retirees, also reported limited stock. Between January and April 2025, Cornwall had just 114 bungalows available for rent, while Nottingham in the East Midlands recorded 164.

In urban areas, the trend was mixed. Some locations, such as Inner London and Manchester, saw small increases in available stock. However, other cities recorded significant declines: Newcastle saw a 27.7% decrease, Cardiff dropped 19.9%, and other areas including Brighton, Sheffield, Glasgow, and Lincoln experienced double-digit reductions.

Nathan Emerson, CEO of Propertymark, commented: “The concern surrounding the lack of available homes to rent in comparison to growing demand from tenants is long-standing and especially affects renters on a lower income, the older population and those with disabilities.

“We can see that year on year, across the board, there has been a significant downturn in the number of bungalows available to rent, which are crucial in the adaptation for those with disabilities and older renters.

“The private rented sector plays an important role in housing the nation and without a significant increase in the number of homes of all types to rent, rent levels will remain higher and, in turn, put financial pressure on those it is designed to help.”

Emerson also called for government action: “We urgently need the attention of all Governments to ensure planning policy and housing strategies recognise housing needs across the country and older people, whether renting or right-sizing, can access suitable housing.”

The findings underscore growing demand for accessible rental housing and a shortfall in supply that is likely to place further strain on vulnerable groups unless addressed through targeted policy and planning measures.

Running counter to predictions from landlord lobbyists, the latest data from the Ministry of Justice paints a more subdued picture: landlord possession claims have actually declined. Specifically, the first quarter of the year saw a 4% drop compared to the same stretch in 2024. This development coincides with a pivotal moment in Parliament—the Renters’ Rights Bill, now moving through its committee stage in the House of Lords.

The numbers challenge a prevailing narrative. Landlord groups had warned of a looming avalanche of evictions, timed to precede the implementation of long-debated reforms. But the evidence suggests otherwise—at least for now.

This has only strengthened calls from housing advocates to accelerate the legislative process. Chief among their demands: immediate enactment of a full ban on Section 21 ‘no fault’ evictions, a provision central to the proposed Bill. The Renters’ Reform Coalition (RRC), a prominent campaign alliance, has thrown its support behind a bold amendment introduced by Big Issue founder Lord John Bird. His proposal would see the abolition of Section 21 evictions take effect the moment the Bill receives royal assent.

“It has been 2,221 days since a UK government first promised to abolish no-fault evictions. Six years, four prime ministers and a change of government later, we’re still waiting for that promise to be fulfilled," said Lord Bird.

“The amendment I’ve raised is imperative for ensuring that there is no further delay. I call on my fellow peers to back my proposal to ban section 21 as soon as legislatively possible when the Renters’ Rights Bill finally assents later this year.”

Yet, despite this momentum, the Bill remains in a precarious position. The House of Lords, where the Government holds no majority, could yet frustrate progress. Among the most contentious ideas floating in the chamber: permitting landlords to demand multiple months’ rent upfront—a practice the current draft seeks to outlaw. Further complicating matters, it emerged in March that Conservative peer Baroness Scott had engaged in dialogue with landlord representatives, reportedly exploring avenues for mounting legal challenges to the Bill.

Campaigners, however, are pressing the Government to resist such backsliding. Tom Darling, director of the RRC, made his case in no uncertain terms: “Homelessness, ill health, anxiety, poverty – the state of private renting in England is responsible for so much misery. And section 21 ‘no fault’ evictions are right at the heart of this broken system. Now it is clear that landlord groups’ warnings of a last minute eviction surge is not taking place, the Government should press on and abolish section 21 immediately once the Bill is passed.”

Darling didn’t stop there. He cautioned against political timidity, warning that pro-landlord tweaks at the Report stage could strip the Bill of its efficacy.

“In its current form, the Renters’ Rights Bill should make a real difference to renters, but it could be undermined by pro-landlord amendments at Report stage. If this happens the Government must strip out any hostile amendments with its Commons majority.

“These long-awaited reforms have strong public support from all sides – to allow the Bill to be watered down at the 11th hour would not only be a shocking betrayal of renters, it would also be terrible politics.”

The urgency is underscored by staggering figures: since the Government—under then-Prime Minister Theresa May—first vowed to eliminate Section 21 in 2019, more than 120,000 households have reportedly received such eviction notices. For those families, the wait has been long, and the stakes remain high.

In a property landscape shaped by uncertainty and regional disparity, landlords in southern England appear to be weathering the storm with notably more optimism than their counterparts elsewhere—this, according to a recent survey conducted by Landbay.

The figures paint a revealing portrait. Nearly one in four landlords in the South—precisely 23%—expressed a positive outlook for the future. Contrast that with the Midlands, where only 17% shared such confidence, and the North, where the percentage dipped even lower to 13%. Yet, it isn’t just optimism that’s regionally skewed—pessimism follows a similar pattern but with a twist. In the North, a staggering 44% of landlords reported feeling negative about their prospects. The Midlands came in close behind at 42%, while in the supposedly more upbeat South, negativity still affected 39%.

Rob Stanton, Landbay’s sales and distribution director, acknowledged the heavy burden landlords bear outside the South: “Given the current economic climate and the state of play when it comes to taxation and future regulation, landlords in the north and Midlands can be forgiven for not feeling more upbeat about their prospects.”

Ownership structure and scale also played defining roles in shaping sentiment. Those operating via limited companies showed a noticeably higher degree of resilience. Only 35% of corporate landlords felt negatively about the future—significantly better than the 56% of individual landlords who felt the same way.

And when it came to portfolio size, confidence followed a curious curve. Landlords with four to ten properties emerged as the most self-assured group, with 31% expressing positivity. However, those at the top end—managing over 20 properties—seemed paradoxically more discouraged, with 55% stating a negative outlook.

One landlord from the South East, who runs operations largely through limited companies, offered this striking observation: “Unless the government unleashes a 1960s-type building boom and build a massive number of council houses, the pressure of limited available rental stock versus the demand from young tenants will ensure rents are buoyant and provide a good business for buy-to-let landlords.”

In contrast, a landlord based in the West Midlands struck a more cautionary note: “The future is going to be tough. While there is a demand, there are headwinds and challenges facing landlords.”

Broadly speaking, a significant share of landlords—around 40%—chose to identify as neutral about the future. Nationally, only 18% of all landlords polled felt positive, whereas 42% fell on the negative end of the spectrum. Interestingly, a minuscule 0.75% said they were planning to sell their entire portfolios—suggesting that while anxiety is palpable, wholesale exits from the market are rare.

Among those who described themselves as neutral, 25% were contemplating selling off parts of their holdings, but none were considering a complete withdrawal. Meanwhile, expansion appears to be on pause for many: nearly half—47%—have no intention of growing their portfolios in the current climate.

Stanton offered further perspective on the shifting terrain: “Landlords have seen some huge changes in the BTL market – increases in stamp duty and the Renters’ Rights Bill being two very significant ones – and may have been unsettled by escalating geopolitical tensions recently, too. That’s all hit sentiment.

“While there are certainly some headwinds to contend with, it is reassuring to know so few of them are choosing to cut and run entirely.

“There are forty landlords looking to expand their properties for every one landlord planning to chuck in their portfolios entirely.”

Despite the clouds, Stanton remained measuredly optimistic: “Property remains a reliable investment vehicle. Not only does demand continue to outstrip supply, rental yields are strong.

“Add in a broad range of products that can support landlords in a wide variety of situations, and I’d argue that, even with headwinds, there is reason to be optimistic about building, maintaining and expanding a rental portfolio.”

Buy-to-let landlords across the UK are currently enjoying their most profitable era in over a decade, with average rental yields soaring to levels not seen since early 2011, according to fresh insights from Paragon Bank.

The data for April 2025 reveals that yields have climbed to an impressive 7.11%, narrowly trailing the peak of 7.12% logged in February 2011. This figure not only eclipses the previous recent high of 6.94% reached in the final quarter of 2024 but also represents a 40 basis point leap year-on-year—a clear sign of upward momentum in the rental market.

Driving this surge is a persistent supply-demand imbalance in the private rental sector. On one hand, tenant demand remains robust—arguably surging—while, on the other, the supply of rental homes continues to lag behind. This mismatch has created fertile ground for yield growth. Meanwhile, the cooling of house price inflation has further enhanced returns, enabling rental income to outpace the appreciation of property values.

A longer view of the trend paints an even more compelling picture. Since bottoming out in the aftermath of 2017—when yields dipped to just 4.91%—returns have been on a steady upward trajectory. Landlords, it appears, have adapted by recalibrating their portfolios and acquisition strategies to focus on assets with superior income-generating potential.

Russell Anderson, commercial director of mortgages at Paragon Bank, commented on the findings: “Our latest lending data highlights how average rental yields have continued to increase from the 13-year high we revealed at the end of last year. While the most recent economic instability caused by the threat of Trump’s tariffs is understandably impacting business confidence across many sectors, these figures offer tangible evidence that buy-to-let continues to offer strong returns for investors.”

Anderson also emphasized the advantage held by landlords who take a more strategic approach—particularly those investing in high-yield properties or regions with strong fundamentals: “This is particularly true where landlords employ a strategy of targeting properties that offer higher returns, HMOs being the most obvious example, or investing in areas where property is relatively more affordable but benefits from the strong tenant demand we see all over the UK.”

Regionally, the data reveals significant variation in yields. Wales emerged as the national leader, boasting an average return of 8.43%, a notable rise from 8.09% just four months prior. Close on its heels were Yorkshire & Humberside (7.97%), the North (7.94%), and the South West (7.93%). In contrast, Greater London—despite seeing a modest improvement of 30 basis points since December—continued to lag, posting the lowest average yield at 5.78%.

When dissected by property type, Houses in Multiple Occupation (HMOs) stood out once again. These properties delivered the strongest returns in the segment, with average yields climbing to 8.50%, up from 8.41% at the end of 2024.