Houses in Multiple Occupation (HMOs) are emerging as the backbone of Britain’s rental market and should sit at the heart of government housing policy, according to Mish Liyanage, founder of the Mistoria Group.
With rents climbing and supply falling short of demand, Liyanage (main picture) argues that HMOs offer a scalable solution that benefits investors, tenants and communities.
He says: “These multi-tenant properties offer a practical solution that benefits investors, tenants and communities alike. The traditional buy-to-let model is being challenged by economic pressures and changing tenant needs.”
And he adds: HMOs deliver superior returns while maximising the use of existing housing stock at a time when we desperately need efficient, scalable solutions.”
BETTER YIELDS
According to Mistoria’s data, HMOs generate an average yield of 10.4% across UK regions, far outstripping standard buy-to-let returns.
The North East leads the way at 15.4%, while the North West and West Midlands also deliver yields above 9.6%.
Beyond returns, HMOs are seen as a vital tool for addressing housing shortages. Converting family homes into multi-tenant properties can accommodate four to six people under one roof, instantly creating affordable accommodation without the delays and costs of new builds.
CHANGING TENANT PREFERNCES
They also reflect changing tenant preferences, particularly among students, young professionals and key workers who value affordability and flexibility.
By diversifying rental income streams, HMOs reduce the financial risk for landlords and provide greater resilience in volatile markets.
Conversions also generate broader economic benefits. Renovation and maintenance work supports local trades, while higher occupancy boosts council tax revenues. In the North East, more than £28.6m has been invested into HMO-based social housing partnerships to support vulnerable tenants.
Liyanage adds: “The property market is evolving, and those who recognise HMOs as strategic assets rather than niche investments will be best positioned for the future. Done responsibly, HMO development supports both profitable investment and community regeneration.”
