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.

Landlords Adapt HMOs to Target Specific Tenant Groups, Paragon Finds

Landlords are increasingly tailoring houses in multiple occupation (HMOs) to attract particular types of tenants, according to research from Paragon Bank. The findings indicate that landlords’ approaches to pitching HMOs to specific clients have influenced investment activity in the sector.

The research found that 92% of landlords’ strategies for marketing HMOs to targeted tenant groups affected their investment decisions. Students were the most commonly targeted group, accounting for 36%, followed by white collar or professional workers at 25%, and young, single tenants at 19%.

A quarter of landlords prioritised en suite bedrooms to enhance their HMO offering, while 19% preferred locations close to work hubs and transport links. Improving energy efficiency was a priority for 23% of landlords. However, the report notes that landlords have been slow to improve Energy Performance Certificate (EPC) ratings, with costs cited as a barrier to meeting the government’s 2030 deadline for all properties to achieve an EPC rating of C.

Despite these challenges, 58% of landlords are investing beyond minimum legal requirements, and half are carrying out regulatory or compliance-focused improvements. The research also shows that 62% of landlords have improved an HMO within the last six months, with a further 24% having done so in the past year.

These findings highlight the evolving nature of the HMO market, with landlords making strategic decisions based on the tenant groups they wish to attract. For letting agents and inventory clerks, this trend may influence the types of property features and compliance checks required in the sector.