Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

HMO Landlords Maintain Investment Despite £10,000 Improvement Costs

More than a quarter of house in multiple occupation (HMO) landlords expect to spend over £10,000 on property improvements in the coming year, according to research from Paragon Bank. Despite these costs, the majority of HMO landlords plan to maintain or expand their property portfolios over the next 12 months.

Paragon Bank’s research found that 28% of HMO landlords anticipate spending more than £10,000 on improvements, making it the most common response. An additional 15% expect to invest between £5,001 and £10,000. The improvements cover both presentation and long-term property standards, including regulatory or compliance upgrades, safety enhancements such as alarms and fire doors, and energy-efficiency works.

Investment activity among HMO landlords remains strong. In the past six months, 62% of HMO landlords have improved a property, with a further 24% having done so within the past year. Looking ahead, 54% said they are extremely likely to carry out further improvements in the next 12 months, and 18% are already in the process of upgrading properties.

Portfolio ambitions remain firm, with 80% of landlords stating they intend to either increase or maintain their overall property holdings in the next year. HMOs continue to be viewed as a profitable investment, with 82% of landlords reporting better rental yields than other residential lettings and 79% noting stronger returns. Paragon Bank’s lending data showed that HMOs generated an average yield of 8.9% in Q2 2026, outperforming all other property types.

For UK letting agents and inventory clerks, these findings highlight ongoing demand for compliance upgrades and property improvements in the HMO sector. The focus on regulatory standards and safety measures may lead to increased requirements for property inspections and documentation.