4 hottest HMO Investment Areas in the UK 2023

The property market is a funny one at the moment. Some investors are clinging to their hats ready for that property crash that some gurus have been screaming about since 2020. Others are carrying on like the stamp duty holiday never finished and just accepting rates have to do what they have always done. The property market may go up or down but what we can’t get away from is that this country suffers from a chronic lack of housing of all types. HMOs are set to boom as well across all tenant types and despite the higher rates and lower cashflows at present, those that continue to accumulate in this period may stand to reap some big rewards later down the line. Let’s take a look at our top 4 hottest locations for HMOs at the moment.



Gillingham has emerged as a prime location for property investment, demonstrating robust capital growth with properties appreciating by an average of £71,500 over the last five years. This equates to a daily increase of £39.18, signalling a strong market for both long-term investments and property flipping, where returns of up to 34.62% have been achieved before costs.


The rental market in Gillingham is particularly vibrant, fuelled by a diverse tenant demographic that includes students, hospital workers, and professionals. This diversity ensures a stable and varied tenant base for Houses in Multiple Occupation (HMOs), making it an attractive prospect for investors. The demand for rental properties is high, with rooms being quickly taken up, and there has been a notable increase in average rents for double rooms over the past five years.


Investors can expect attractive yields, starting from 5% per annum with the potential to reach double digits. The resilience of the Gillingham property market is evident, not only providing strong returns for the average investor but also enabling a group of motivated buy-to-let landlords to become particularly wealthy.


The area boasts a wide range of property styles and ages, from Victorian-era homes to modern developments, offering diverse investment opportunities. Properties are available at competitive prices, with investment opportunities under the £100,000 mark and prestige properties exceeding £500,000.


Gillingham’s strategic location, with its proximity to London and significant investment and development over the last decade, has made it an investor hotspot. The area has seen development in retail, hospitality, sports, and leisure facilities, along with improved transport links, enhancing its overall appeal.


For HMO investors, Gillingham presents a compelling case. The importance of location, property suitability for HMO conversions, and the inclusion of amenities and en-suites are key considerations that can attract tenants and command higher rents.


Furthermore, demographic shifts and the rising cost of living have led to an increased demand for rental properties, benefiting HMO landlords. The changing tenant demographic towards more professional renters has raised expectations for property finishes, creating opportunities for investors who meet these expectations to capitalise on the strong market.


In summary, Gillingham stands out as a lucrative area for property investment, offering a combination of capital growth, rental demand, and strategic location, making it an attractive destination for both novice and seasoned HMO investors.


County Durham

County Durham emerges as a distinguished location for buy-to-let investments within England, offering a compelling blend of high rental yields and a diminished risk of depreciating property values. This region is witnessing a notable shift in investor interest, moving away from the traditionally favoured South East towards the North East, drawn by the allure of higher rental yields and a sense of stability.


The property market in County Durham is characterised by its diversity, with the city centre commanding premium prices and the suburbs presenting more economical options. The average property value in Durham stands at £164,693, rendering it a more accessible market compared to the broader North East England. Over the past five years, certain locales within Durham have experienced a noteworthy appreciation in property values, while others continue to offer affordable housing opportunities.


Houses in Multiple Occupation (HMOs) have risen to prominence as an investment choice, outshining traditional buy-to-let properties with their considerably higher yields. In 2021, the average yield for an HMO in the UK was recorded at 7.5%, a stark contrast to the approximate 4% yield of a standard buy-to-let property. The demand for HMOs is on an upward trajectory, further bolstered by legislative changes that have significantly enhanced their value in recent times.


However, it is imperative to acknowledge that HMO investments necessitate effective management, given their larger size and the complexity of housing multiple occupants. This underscores the importance of robust property management practices to ensure the success and profitability of such investments.


In summary, County Durham presents a robust investment landscape, marked by its potential for high rental yields, appreciation in property values, and the lucrative prospects offered by HMOs, making it an attractive destination for discerning investors.



Investing in the Wirral presents a compelling opportunity for property enthusiasts, particularly in the burgeoning town of Birkenhead. This area is currently undergoing a transformative regeneration, poised to create 6,000 new jobs and construct 21,000 new homes. The ambitious Wirral Waters scheme is set to revitalise a vast 500-acre stretch of old dockland, introducing 13,000 new homes, office spaces, manufacturing industries, and a host of educational and cultural amenities.


Birkenhead’s impending Freeport status, as part of the Liverpool City Region Freeport, is expected to magnetise further businesses and investment, bolstering the local economy. Property values in Birkenhead remain significantly below the national average, presenting an attractive proposition for high returns on investment. The rental market is robust, catering to a diverse demographic of local residents, workers, and commuters, with average rents and yields presenting an enticing prospect for investors.


The Wirral Peninsula, with its stunning coastline and vibrant communities, is an idyllic destination for first-time property investors. A thorough understanding of the local property market is indispensable, encompassing the demand for various property types and the identification of neighbourhoods brimming with potential. Clear financial objectives are paramount, whether one seeks rental income, capital growth, or a combination of both.


St Helens

St Helens, a town nestled in the heart of North-West England, emerges as a beacon of opportunity for property investors. Its strategic location, a mere 12 miles from Liverpool and 21 miles from Manchester, positions it as a hub of connectivity and convenience. The town, historically part of Lancashire and now within the Merseyside region, boasts a population of approximately 102,600, offering a vibrant community for potential tenants.


The town’s economy, historically rooted in manufacturing and glassmaking, has diversified, witnessing a 75% increase in business start-ups over the last five years. This economic vitality is a testament to St Helens’ role as a key contributor to the Liverpool City Region’s £29.5 billion economy. Businesses in St Helens enjoy low overheads while meeting all business needs, making it an attractive location for investment.


Transport links are a particular strength, with excellent road connections and several train stations providing direct access to Liverpool and Manchester in under 30 minutes. The town is also less than 20 minutes from the Port of Liverpool and well-connected by the West Coast Main Line and Trans Pennine rail networks. With Liverpool John Lennon Airport and Manchester Airport both within a 30-minute drive, St Helens offers unparalleled air connectivity.


The property market in St Helens has shown remarkable resilience and growth, with house prices increasing by 15.3% between January 2021 and January 2022. The average house price, as of early 2022, was £172,119, indicating a significant boom in the housing sector. This growth is set against a backdrop of a seller’s market, with demand outstripping supply, potentially leading to profitable sales for property owners.


For buyers, particularly aspiring landlords, St Helens presents an opportune time to invest. There is a shortage of houses to rent, potentially leading to a steady rental income. Rental amounts for quality, new build properties have been at the top end of predictions, producing gross yields of up to 6.2%. Two and three-bedroom houses, particularly new builds, are highly desirable, with prices starting from only £117,500.


St Helens is not only a place of economic opportunity but also a desirable place to live. It offers a range of housing options, excellent educational institutions, and a variety of sporting and cultural events. With ambitious plans to regenerate the town centre, introducing new retail facilities, educational facilities, modern offices, better transport links, new public spaces, and more homes, St Helens is poised for a bright future.


In summary, St Helens offers a dynamic and promising landscape for property investment, characterised by its strategic location, robust economy, and thriving property market. Success in this venture often hinges on meticulous planning, patience, and the ability to adapt to the ever-changing property landscape.


In Summary

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