Today, beginning of March 2025, we are taking a deeper dive into the HMO market in Scarborough.
Scarborough is a seaside town located in the North East of England, an area that has enjoyed one of the highest grows nationally in underlying house prices during 2024.
Scarborough has a population of 108,000 and therefore falls into our secondary areas for HMO demand (primary = 250k plus, secondary = 100-250k, tertiary = below 100k)
The economy is made up of retail, tourism and public sector with particular growth in manufacturing, off-shore wind farming and significant growth in the digital and creative industries. Coventry University have also, since 2015, established a university presence in the town.
There is also a General Hospital on the outskirts of the town. There are 556 beds at Scarborough Hospital and employs roughly 4,000 staff. It is also the second biggest hospital in Yorkshire.
Houses in Scarborough
There are 29,700 houses in the wider Scarborough area, but 19,300 in Scarborough town itself. There are 1,972 properties currently on the market in Scarborough. This makes up 10% of the houses in Scarborough being up for sale which is higher than the national average of 4%.
Article 4 in Scarborough
Scarborough has a few areas of unspecified article 4 restrictions around the castle, and a few smaller areas on the outskirts. However, Scarborough largely remains untouched for article 4, most notably around the hospital which could present investors with a significant opportunity for HMO developments.
HMOs in Scarborough
According to our tools there are 118 HMOs in Scarborough. This is purely based on properties that have an HMO licence.
There are 46 properties in Scarborough that have planning permission approved for HMO conversion.
In total, our estimates suggest there are 144 HMOs in Scarborough that have HMO licences and/or planning permission for conversion.
Make up of HMOs in Scarborough
From the data we have assessed, 37% of HMOs are flats, 53% are terraced houses, 4% are detached and 6% are semi-detached. This is reflective of the large Victorian houses available in Scarborough town which have been sub-divided into flats.
Scarborough HMOs versus national statistics
HMOs in Scarborough make up 0.7% of the housing stock. Across England and Wales, HMOs make up between 1.4% and 2.1% of the overall housing stock. This means that Scarborough is currently under saturated for the population that it has.
Tenant Statistics
25% of rooms for let are under £500, 50% are between £500 and £600 per month, and 25% are above £600 per month
95% of the rooms available in Scarborough are double rooms, the rest are single rooms
Almost 50% of rooms in Scarborough HMOs are ensuite rooms which is almost 100% higher than the national average.
The vast majority of rooms in Scarborough are for working professionals, however there is a growing number available to rent to students, now currently 50% available to rent for students which means there is a large number of mixed tenant type HMOs in Scarborough.
Summary
Scarborough presents a growing opportunity both for rental cashflow and equity growth that should be further investigated by HMO investors.
