Are HMOs a Dream Deal For Landlords or a Potential Nightmare?

Posted on Wednesday, September 12, 2018

Are HMOs a Dream Deal For Landlords or a Potential Nightmare?

Recently, our founder, Bill Rockett, produced an article voicing his concerns on the number of HMOs in The Potteries - a thought-provoking piece that sparked a great deal of healthy debate within the industry.

The HMO, or House in Multiple Occupation, is a dream that is being sold by droves of developers - but in the local area at least, these occupancies come with a host of potential pitfalls.

In recent years, companies have emerged everywhere offering to source, renovate and manage HMOs – with the promise of colossal returns and long-term wealth.

But the reality, in our area specifically, is quite a different story. Here, thousands of rooms have been created, but for a relatively minuscule market, which has resulted in the following issues:


  • Plummeting room rates.


  • A wealth of unfilled rooms.


  • A host of issues due to these houses not being built to house this amount of people.


  • Steep maintenance and annual refurbishment costs.


  • Anti-social problems.


  • A great deal of maintenance and tenant issues.


  • Quality tenants shunning HMOs as a result of bad experiences in shared housing.


  • The quality of the HMO tenants dropping as prices plummet.


  • Many landlords stating that for the first time they are genuinely struggling to source tenants for their HMOs.


At this point, it’s worth noting that Bill’s concerns are based on what he has personally experienced in The Potteries this summer - and this isn’t a reflection of the UK in its entirety, nor is this an attack of any kind.

In the wake of the original article’s debate, here is Bill’s follow up interview with Property Tribes explaining the situation in its entirety. 

From this, it’s clear that Bill has identified some fairly concerning trends and patterns here, something that is certainly worth due thought and consideration.

While HMOs may sound like a sustainable wealth-generating venture, the reality might not match up to the expectation - that said, family homes tend to make more of a worthwhile investment outside of the Big Smoke.

You can read Bill’s original article on Property Industry Eye and get the full story right here.