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

HMO Landlords Plan Major Property Upgrades Over Next Year

Experienced HMO landlords are set to invest heavily in their properties, with the largest proportion expecting to spend more than £10,000 on improvements over the next 12 months, according to Paragon Bank. The data shows that three quarters of these landlords have been letting property for at least 10 years, and more than half cite long-term investment as a key motivation for providing HMOs.

Paragon Bank’s findings indicate that 80% of HMO landlords intend to either increase or maintain their property portfolios in the coming year. Investment activity remains robust, with 62% of landlords having improved a property within the last six months and a further 24% doing so within the past year.

Looking ahead, 54% of landlords said they are extremely likely to carry out further improvements in the next 12 months, while 18% are already in the process of upgrading their properties. When asked about expected spending, 28% of landlords anticipate investing more than £10,000, making this the most common response. An additional 15% expect to spend between £5,001 and £10,000.

The types of work being undertaken include both presentation upgrades and long-term property standards. Common improvements involve decoration, kitchen and bathroom upgrades, as well as regulatory or compliance works, safety enhancements such as alarms and fire doors, and energy efficiency measures.

Paragon’s data also highlights the commercial appeal of HMOs, with 82% of landlords agreeing that HMOs offer better rental yields than other residential letting properties, and 79% stating they generate better profitable returns. Paragon’s lending data shows HMOs achieved an average yield of 8.90% in Q2 2026, the highest of any property type recorded by the bank.

These findings are relevant for UK letting agents and inventory clerks, as they point to ongoing investment in property standards, compliance, and safety within the HMO sector.