In today’s rental market, Houses in Multiple Occupation (HMOs) are becoming an increasingly popular solution for both tenants and landlords. But what exactly is a HMO property, and – if you’re a landlord – why should you consider investing in one?
In this guide, we explore what HMO means in property, how you can find an HMO to rent or buy, whether you can live in one, and most importantly, how to manage an HMO effectively.
If you’re considering entering the HMO market, whether as a tenant or investor, this guide provides your comprehensive roadmap.
What does HMO mean in property?
A HMO (House in Multiple Occupation) is a property rented out by at least three tenants who aren’t from the same household but share communal facilities like a kitchen, bathroom, or toilet.
Essentially, it’s a form of shared living accommodation, often made up of individual bedrooms and common areas. These properties are popular among students, young professionals, and people looking for affordable rental options.
For a property to be legally classified as an HMO, it must house multiple households. A household is defined as either a single person or members of the same family living together. So, for example, three friends sharing a house would constitute an HMO, whereas a family of three would not.
Why HMOs matter in the rental market
As housing affordability remains a challenge in many urban centres, shared living models provide a more accessible alternative for renters.
From an investment perspective, HMOs present opportunities for landlords to increase rental yield and reduce dependency on a single tenant. Since rent is collected from multiple occupants, HMOs are often more financially resilient to voids or late payments.
For many tenants, HMOs also offer the benefits of social living, all-inclusive bills, and shorter lease terms. With the demand for this type of accommodation growing across cities and university towns, HMO investment has become a prominent strategy among both new and seasoned landlords.
How to find HMO properties to rent
Finding an HMO property to rent is easier than ever, with a wide range of online platforms to explore. Websites like SpareRoom, Rightmove, and Zoopla regularly feature HMO-style rooms and shared homes, while search terms such as “house share,” “student accommodation,” or “multiple occupancy” can help refine your results.
For more tailored options, specialist sites like OpenRent, PropertyFilter, and AgentHMO offer direct access to HMO listings, often with added details about room layouts, shared facilities, and included bills. If you’d like a more local perspective, feel free to browse our available rental properties or get in touch — we’re always happy to help you find the right fit.
Before committing to a rental, it’s crucial to ensure the property is legally compliant. HMOs, especially those housing five or more tenants, must be licensed by the local council. This ensures that safety standards are met, including proper fire escapes, smoke alarms, and adequate bathroom and kitchen facilities.
Can I buy an HMO property to live in?
Yes, you can buy an HMO property to live in. While the majority of HMOs are purchased for investment purposes, nothing is stopping you from living in one yourself, even if it’s currently being used as shared accommodation. However, there are a few considerations to keep in mind.
If the property is licensed as an HMO under the C4 use class (which applies to small HMOs), and you intend to convert it back into a single-family dwelling, you may need to apply for a change of use to class C3. Local planning policies vary, especially in Article 4 areas where HMO conversions are tightly regulated, so checking with your local council is essential.
Mortgage lenders may also treat HMO purchases differently.
When considering the purchase of a House in Multiple Occupation (HMO) to live in, there are several key points to bear in mind. Some will have specific lending criteria, even if you plan to occupy the property yourself.
Be prepared to explain your intended use clearly and seek advice from a broker familiar with HMO lending. If there are tenants in place, you must also respect their rights and follow proper legal procedures to gain vacant possession.
How to find HMO properties for sale
Searching for an HMO to buy requires a more strategic approach than a typical residential purchase. While mainstream portals like Rightmove and Zoopla are a good starting point, the best HMO deals are often uncovered through specialist channels.
Websites such as PropertyData and PropertyEngine offer advanced search features that allow you to filter by HMO potential, access local licensing data, and even compare market yields. PropertyFilter, for example, also allows you to search by number of rooms and flag conversion opportunities.
Tap into local knowledge and online communities
Beyond digital platforms, estate agents who specialise in investment properties can be valuable allies. Building a relationship with local agents, attending viewings, and staying top-of-mind can unlock early access to properties and even off-market opportunities.
Social media groups and investor forums are another goldmine for leads. Join UK-based landlord and property investment communities on Facebook, LinkedIn, and WhatsApp. Engage in discussions, make your investment goals known, and you may soon receive tips on unlisted deals.
Assessing HMO potential
Before purchasing, you need to assess whether a property is suitable for HMO conversion. Does the layout support multiple bedrooms? Is there enough space for shared bathrooms and kitchens? Are the minimum room sizes compliant with national standards?
Location also matters. HMOs tend to perform best in areas with transient populations, such as university towns, city centres, and employment hubs. Research local demand, council regulations, and competition before moving forward. It’s wise to check whether the area is subject to Article 4 directions, which may restrict HMO conversions and require planning permission.
How to manage an HMO property
Managing an HMO is more involved than a standard buy-to-let, so it makes sense to trust lettings experts such as Lovelle to manage your property for you. From fire safety compliance to handling tenant relations, HMO management requires careful planning and ongoing diligence.
At the core of good HMO management is licensing. If your HMO has five or more tenants, you must apply for a mandatory licence through your local council. This process involves meeting a series of conditions, including safety standards, room size requirements, and providing adequate shared amenities.
Fire safety is a major focus. You’ll need interconnected smoke alarms, fire doors, extinguishers, and marked escape routes. Waste management, regular inspections, and proactive maintenance are also critical for keeping the property in good condition and tenants happy.
Tenant management involves vetting applicants, setting clear house rules, and resolving conflicts fairly. Communication is key, both in terms of responding to tenant issues and keeping everyone informed of expectations.
Key responsibilities in managing an HMO
- Licensing and local authority compliance
- Fire safety equipment, signage, and escape routes
- Maintenance of communal areas and infrastructure
- Tenant communication and dispute resolution
- Waste disposal procedures and recycling provisions
- HMO-specific insurance and liability coverage
- Budget tracking and expense management
Is HMO investment still worth it?
HMOs remain a viable and potentially lucrative investment strategy. However, the landscape is more regulated and competitive than ever. Rising energy prices, licensing fees, and increased tenant expectations mean landlords need to approach HMOs as fully operational businesses, not passive investments.
For those willing to stay compliant, manage proactively, and deliver a high standard of accommodation, the returns can be impressive. Many investors find that with five or more well-let rooms in the right area, the income far exceeds what a traditional buy-to-let would yield.
Ready to explore the HMO market?
Whether you’re looking to rent a room, purchase your first HMO, or need help managing an existing one, understanding what makes HMOs work is key to long-term success. From sourcing and compliance to tenant relationships and yield optimisation, there’s much to consider, but also much to gain.
If you’re ready to take the next step, your local Lovelle branch can provide tailored advice and help you identify opportunities in your area. Our team understands the local market and can assist with everything from sourcing high-yield properties to finding quality tenants.
Get in touch today and let’s unlock your property’s full potential, one room at a time.
Further reading:
How to Prepare Your Property for New Tenants
