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.
Landlords Tailor HMOs for Defined Tenant Groups
Landlords are increasingly adapting houses in multiple occupation (HMOs) to appeal to specific tenant groups, according to new research from Paragon Bank. The research found that 92% of landlords have adapted or presented their HMOs to attract a particular type of tenant.
Students are the most commonly targeted group, with 36% of landlords focusing on this segment. White-collar or professional workers are targeted by 25% of landlords, while 19% aim their HMOs at young single tenants. This targeted approach is influencing both property upgrades and acquisition strategies.
A quarter of landlords now prioritise ensuite bedrooms when seeking new investment opportunities. Additionally, 19% favour HMOs located near work hubs or transport links, while larger bedroom sizes (19%) and improved energy efficiency (23%) are also key considerations.
Upgrades and Tenant Expectations
Investment activity in the HMO sector reflects this targeted positioning. The research shows that 62% of landlords have improved an HMO within the last six months, with a further 24% making upgrades in the past year.
Tenant expectations are a significant driver of these changes. According to the findings, 40% of tenants seek faster broadband, 39% look for ensuite bathrooms, and 33% prefer rentals where bills are included.
Landlords are also investing to enhance overall standards, with 58% undertaking upgrades beyond minimum legal requirements. Half of the landlords surveyed have carried out regulatory or compliance-focused improvements.
These trends highlight the evolving nature of the HMO market and the importance for letting agents and inventory clerks to be aware of changing landlord strategies and tenant demands.
Source: Mortgage Strategy