Experienced HMO landlords are continuing to invest in their properties, with many planning significant spending on improvements over the next 12 months.

Research from Paragon Bank shows that 28% of HMO landlords expect to spend more than £10,000 on property improvements during the coming year, making this the most common spending range. A further 15% expect to spend between £5,001 and £10,000.

Recent investment activity has also been strong. Some 62% of HMO landlords said they had improved a property within the past six months, while a further 24% had carried out work within the previous year. Looking ahead, 54% said they were extremely likely to make further improvements during the next 12 months, while 18% were already carrying out upgrades.

The work ranges from decoration and improvements to kitchens and bathrooms through to regulatory and compliance-related upgrades. Landlords are also investing in safety measures, including alarms and fire doors, as well as energy efficiency improvements.

Experienced landlords taking a long-term view

Three-quarters of the HMO landlords surveyed have been letting property for at least 10 years, while more than half identified long-term investment as one of their main reasons for becoming an HMO provider.

That long-term approach is also reflected in portfolio plans. Around 80% said they intend either to increase or maintain their overall property portfolio during the next 12 months.

The survey also found that 82% of landlords agreed HMOs offer better rental yields than other residential letting properties, while 79% said they generate better profitable returns.

Paragon Bank lending data showed that HMOs generated an average yield of 8.90% in the second quarter of 2026, the highest of any property type recorded by the bank.

Paragon Bank managing director of mortgages Louisa Sedgwick said: “These findings show that many HMO home providers are experienced operators who continue to take a long-term view of the sector.”

“HMOs can be more complex to manage than standard buy-to-let properties, but they remain attractive to landlords who understand the market and have the expertise to operate successfully within it.”

“What stands out is that landlords are continuing to invest as standards, costs and regulation evolve. The level of planned expenditure suggests that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well positioned over the long term.