Experienced HMO landlords are continuing to invest in their properties, with the majority expecting to spend more than £10,000 on improvements over the next 12 months, Paragon Bank reveals.
The data shows that three-quarters of landlords rent out their properties for at least 10 years, while more than half said long-term investment was one of their main motivations for becoming HMO providers.
Paragon says the commitment is also reflected in owners’ portfolio plans, with 80% saying they intend to either increase or maintain their overall property portfolio over the next 12 months.
Investment activity remains strong, with 62% of HMO property owners improving their properties within the last six months, and 24% doing so within the past year.
Looking to the future, 54% said they were very likely to make further improvements in the next 12 months, while 18% were already in the process of upgrading properties.
When asked how much they expected to spend on improvements over the next year, 28% said more than £10,000, making it the most popular answer.
15% expect to spend between £5,001 and £10,000.
Ongoing work includes both presentation and long-term ownership criteria.
While décor and kitchen or bathroom improvements remain popular, landlords are also investing in regulatory or compliance upgrades, safety improvements such as alarms and fire doors, and energy efficiency work.
The data found that the business case for continued investment remains clear, with 82% of landlords agreeing that HMOs offer better rental returns than other residential properties, and 79% saying they achieve better profitable returns.
This is supported by representative lending data, which shows that HMOs achieved an average return of 8.90% in the second quarter of 2026, the highest rate of any property type recorded by the bank.
“These results show that many HMO home care providers are experienced operators and continue to take a long-term view of the sector,” says Louisa Sedgwick, managing director of mortgages at Paragon Bank.
“HMOs can be more complex to manage than standard buy-to-let properties, but are still attractive to landlords who understand the market and have the experience to operate successfully within it.”
“What stands out is that landlords are continuing to invest as standards, costs and regulations evolve. The level of planned expenditure indicates that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well-placed over the long term.”
