Almost three in ten plan to spend £10,000
Committed HMO landlords plan to invest more than £10,000 on improvements over the next 12 months, according to new research from Paragon Bank.
It found that 62% of HMO landlords had already improved a property within the last six months and a further 24% in the past year, while more than half (54%), said they were extremely likely to carry out further improvements in the next 12 months. 18% were already in the process of upgrading properties.
HMO landlords were most likely to be planning an investment spend of more than £10,000 over the next year, at 28%. A further 15% expect to spend between £5,001 and £10,000.
Landlords are investing in both cosmetic improvements such as decoration and kitchen or bathroom upgrades in their HMOs, as well as regulatory or compliance upgrades, safety improvements such as alarms and fire doors, and energy efficiency works.
Three-quarters of HMO landlords letting for 10 years or more
The study also found that three-quarters of HMO landlords have been letting property for at least 10 years, with long-term investment one of their main motivations for more than half.
80% said they intend to either increase or maintain their overall property portfolio over the next 12 months.
Many are attracted by yields, with more than eight in ten (82%) of landlords saying that HMOs offer better rental yields than other residential letting properties and 79% saying they generate better returns.
Paragon lending data showed HMOs generated an average yield of 8.90% in Q2 2026, the highest of any property type recorded by the bank.
Louisa Sedgwick, managing director of Mortgages at Paragon Bank, said: “These findings show that many HMO home providers are experienced operators who continue to take a long-term view of the sector. HMOs can be more complex to manage than standard buy-to-let properties, but they remain attractive to landlords who understand the market and have the expertise to operate successfully within it.
“What stands out is that landlords are continuing to invest as standards, costs and regulation evolve. The level of planned expenditure suggests that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well positioned over the long term.”
