Houses in multiple occupation generated average annual rental income of £33,400 in Q4 2025, up from £28,200 the previous year, according to data from specialist lender Lendlord.
The analysis, based on 1,158 HMO properties, showed the national average yield fell to 9.6% from 10.4% year-on-year, marking a decline below the 10% threshold for the first time.
Regional distribution
The North West holds the largest share of the HMO market at 17.9%, followed by Greater London at 16.5%. The North East recorded the highest average yield at 15.1%, though this represents a decrease from the previous year. Despite strong returns, the North East accounts for just 3.6% of HMO properties by volume.
Property values and returns
Regional disparities in property values remain substantial. Average HMO values in Greater London reached £684,724, an increase of £24,497 year-on-year, compared with £232,461 in the North East.
Greater London generated the highest annual rental income per property at £55,017, though this corresponded with significantly higher capital values.
Aviram Shahar, co-founder and CEO of Lendlord, said: “The importance of HMOs to property investors has never been clearer and our Q4 2025 figures highlight that yields have remained fairly constant year on year with the average annual rent increasing by an impressive £5,000 in just one year.”
Market outlook
The data indicates continued rental growth across the HMO sector, though rising property values have compressed yields in most regions. Performance variation across the country remains significant, with the gap between highest and lowest regional yields exceeding 10 percentage points.
