HMOs are an essential part of the housing market in England and Wales and invariably only hit the news due to antisocial behaviour or complaints over a planning application. But in reality with over 350,000 HMOs in the UK they provide a very essential part of the housing market. With real inflation taking hold since covid and hitting the lowest earners, demand for HMO rooms has continued to rise which is reflected in all time high HMO room rents across the country.
We decided therefore to take a helicopter look at the HMO market across the country to see what we can see. We use Searchland as our tool of preference and all data has been compiled from their platform. This report serves as a report for all investors or budding HMO enthusiasts to get a grip on the HMO market across England and Wales. We don’t have data for HMOs north of the border so we are sorry Scotland that we have had to exclude you!
How many properties are there in the UK?
According to ONS statistics from 2021 there are 26.4 million properties in the UK.
How many HMOs are there in the UK?
According to a Government research paper there were approximately 497,000 HMOs in England and Wales in 2018. According to our tools, however, we have found an estimated 362,023 HMOs in England and Wales in 2025. These are classified as either licensed and/or having planning permissions.
Out of the 360,000 HMOs in England and Wales, our market tools indicate that there are just over 7,000 licenced HMOs in Wales.
HMO Sales Market
Out of the 26.4 million properties in the UK, approximately 1.05 million properties are currently listed for sale, representing 3.97% of the total housing stock.
Compare this to the HMO market there are 87,000 HMOs for sale currently on the market in the UK which seems incredibly high. Looking at the details of this 84,500 of these are flats. A lot of these are PBSA but a lot of standard 2 to 4 bed HMOs appear to have HMO licences or are within a larger block of flats.
Approximately 34,409 HMOs have never hit Rightmove since it began in July 2000 which makes up around just under 10% of the total HMO supply.
HMO Property Classification
Out of all the HMOs in England and Wales, 61% of HMOs are flats, 24% are within commercial buildings (mixed use, shop and top style properties), 10% are in terraced houses, 3% are in semi-detached, and 1% in detached houses.
HMO Ownership
Out of all the HMOs in England and Wales. Private landlords dominate the HMO market, owning 267,170 properties—accounting for 73.8% of the sector. Company-owned HMOs make up 83,334 properties (23%). The remaining 3% are owned by other entities such as housing associations, local authorities etc.
HMO Sizes & Bedrooms
Based on the data we can access it’s difficult to aggregate data by number of rooms.
Internally, there is a general cut off of HMOs that are under 135m2 being 6 beds and below, and those above 135m2 should be 7 beds and above. Based on this categorisation we can roughly say that 80% of HMOs in the UK are 6 beds and under, and 20% are 7 beds and above.
We have also analysed all HMOs that have sold (excluding HMOs in flats) to identify percentages of HMOs with different room sizes, totalling 88,318 HMO properties. Assuming HMO sales data are reflective of all HMOs in England and Wales then we can deduce the following splits:
1 bed HMOs = 7%
2 bed HMOs = 13%
3 bed HMOs = 29%
4 bed HMOs = 20%
5 bed HMOs = 16%
6 bed HMOs = 11%
Sui Generis HMOs (with 7 beds or more) = 5%
HMO Tenures
Excluding HMOs that are flats, there are 109,000 HMOs that are held Freehold, making up 79% of the market. The remaining 21% of HMOs are Leasehold.
Summary
This report has thrown up a few noticeable quirks that we were not expecting.
The large percentage of HMOs that are deemed to be flats is quite surprising and makes up a significantly larger percentage of the HMO market than we thought. Through our agency, 80% of our HMOs are in terraced house conversions, 15% in semi-detached and 5% in detached buildings.
The second most surprising find in this data is the number of bedrooms reported. The majority of HMOs that we sell are 5 and 6 beds. We get a few 4 beds and we get a fair amount of Sui Generis running from 7 beds to 30 beds. But the report shows that the highest percentage of HMOs are 3 beds which is unusual. This may be incorrect data being fed through the tools we use (which is unlikely), or the information that is being pulled into this report is inaccurate from Rightmove. The latter is more likely for me.
The third noticeable finding from the report is the number of HMOs across the country. This appears to be decreasing based on statistics from 2010 to 2020. This is of concern to the UK housing economy but presents a significant opportunity, if it is the case, for HMO investors. There are currently only 12 major conurbations left in England and Wales with populations above 100,000 that do not have article, so when you combine the prevalence of article 4 with the rise in demand for HMO accommodation, and the overall reduction in HMOs across the country then you have strong market conditions for the asset class.
It’s therefore my conclusion that the HMO market nationally is set to be very strong for the remainder of the decade.
