The North East offers BTL investors the best HMO rental yields in the UK, with the highest rental income to be found in the South East.
Property management and financial platform Lendlord’s HMO Data Analysis Report reveals an inverse correlation between property values and yields, pointing to opportunities for investors to maximise returns in regions with lower property prices but higher yields.
The report sheds light on the stark contrasts between regions. Greater London dominates the market, accounting for 20.6% of all HMOs analysed, yet offers lower yields compared to the North East, where investors can achieve the highest returns of 15.4%.
Meanwhile, the South East delivers the highest annual rental income at £46,041, making it a compelling option for landlords seeking a balance between capital value and rental returns, says Lendlord.
Regional price-to-rent ratios range from 2.7 years (North East) to 6.5 years (Greater London), with an average of 4.2 years. In terms of annual return on investment, the North East comes in at 37%, with the lowest return in London of 15.4%.
The North West has the second largest concentration of HMOs (15.1%) followed by the West Midlands (11.8%). Drawing on data from 1,126 HMO properties during Q4 2024, it found that property prices ranged from £125,400 to £660,227, with average annual rent of £28,248 and an average yield across the UK of 10.4%.
Aviram Shahar (pictured), co-founder and CEO, says the HMO market remains a cornerstone of the UK’s rental sector, offering significant opportunities for landlords and investors.
He adds: “However, maximising its potential requires clear, data-driven insights. This report highlights key trends and regional disparities, providing landlords and brokers with the information they need to make informed, strategic decisions.”
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