Research also reveals the nation's HMO hotspots
The combined value of England’s house in multiple occupation (HMO) market is estimated to be almost £26 billion in current market conditions, latest analysis by Revolution Brokers has shown.
Currently, there are some 55,849 HMOs in operation across the rental market in England. With the average HMO worth £464,546 in the current market and the total market value is £25.94 billion.
The research also showed that London is the home to the most valuable HMO portfolio of all regions. With 13,528 HMOs found in the capital alone, the city has the highest proportion of HMO rental properties in England. It is also home to the highest average HMO house price at £826,209 and, as a result, the highest total HMO market value at £11.2 billion.
The East Midlands is the nation’s second HMO hotspot, with the 10,737 HMOs located in the region accounting for 19% of the nation’s total stock. However, with an average house price of £274,126, the region is home to a total market value of £2.9 billion, the fourth largest in the nation.
It is the South West and South East that sit second and third when it comes to total HMO market value, with HMO stock in each region sitting at £3.8 billion and £3.3 billion respectively.
The North East has the lowest level of HMO properties at 715, accounting for just 1.3% of the national total. With an average HMO house price of £263,024, it is also home to the most affordable HMO price tag. The total market value of the region’s HMO portfolio is £118 million.
Read more: Demand for high-end HMOs growing.
“We have now started to see the HMO sector come under the same scrutiny as the wider buy-to-let space when it comes to a raft of new rules and regulations designed to improve tenant welfare,” Almas Uddin, founding director of Revolution Brokers, commented. “While this is, of course, a step in the right direction, it means additional time and money spent by HMO providers to ensure they are operating above board.
“The worry is that these additional requirements may deter HMO investment and reduce the level of suitable HMOs that are available, leaving tenants with no choice but to rent from those who were already providing below-par accommodation and will no doubt continue to do so.
“The good news is that so far, this does not seem to be the case, and the nation’s HMO portfolio not only remains robust, but is worth an incredible sum in the current market.”
