Are HMO’s worth it Under the Labour Government?

September 17, 2025

With over 33 years of expert experience in HMO development and management, we have seen every possible economic and political shift. Changes in government, tax rises, new regulations and even recessions are, in reality, just temporary noise. What remains constant is the strength and resilience of high quality HMO investments.

Jeff, our managing director, has personally owned and managed HMO properties for decades. Over that time, he has seen governments of all political colours come and go, as well as significant changes to tax rules, compliance standards and regulations. Despite all of these shifts, our HMO properties have consistently weathered the storm and proven to be reliable, high-performing assets that deliver returns year after year.

Recently, headlines have focused on Rachel Reeves, the current Chancellor, and her suggestions around potential tax increases. While these proposals may cause uncertainty, the reality is that such policies often face strong opposition and may never fully materialise. Investors who have been in the HMO market for a long time understand that talk of tax changes has always been a feature of UK politics, and in most cases, the fundamentals of the housing market remain unchanged.

The reason is simple. Demand for high quality shared living continues to grow. Rising private rental costs and the increasing expense of buying a home mean that more people are turning to well managed HMOs as an affordable and attractive option. This demand is structural, not political.

The HMO market itself proves the point. The UK HMO industry is currently worth an estimated £78 billion, with an annual rental income of more than £6.3 billion. These are not small numbers. They demonstrate that HMOs are not just a niche strategy but a core part of the UK housing and investment market.

Even under today’s uncertain climate, HMO properties remain the most popular type of investment in the UK. Investors are, however, faced with a challenge. As landlords who cannot keep up with modern compliance and licensing standards leave the market, a flood of substandard HMO stock is appearing for sale. Many of these properties are poorly converted, non compliant and carry significant risks for buyers.

This is where we stand apart. At Foot Forward Properties, our HMOs are high yielding, fully managed and always compliant. Every property we offer meets strict regulatory standards and is designed to deliver long term, sustainable income.

If you are considering whether it is worth buying a HMO investment under the Labour government, the answer lies not in short term political noise but in the proven resilience and ongoing demand for well managed HMOs. With over three decades of experience, we know that the fundamentals of this market are strong, and the right property can deliver excellent returns whatever party is in power.

Frequently Asked Questions about HMO Investments under Labour

Will Labour increase tax on HMO investments?
Rachel Reeves has spoken about raising certain taxes, but many of these proposals are unlikely to fully go ahead in their suggested form. Historically, even when changes have been introduced, the demand for quality HMOs has remained strong and returns have continued.

Why are HMOs still profitable despite political uncertainty?
The profitability of HMOs is driven by demand, not politics. With private rent costs rising and house prices increasingly unaffordable, more people choose shared living. This keeps occupancy high and rental income steady.

Is the HMO market really that big?
Yes. The HMO sector is worth around £78 billion and generates more than £6.3 billion in annual rental income. This makes it one of the most important areas of the UK housing market.

What risks should investors be aware of right now?
The main risk is buying non compliant or unlicensed HMOs being offloaded by landlords exiting the market. These properties may look cheap but can quickly become costly mistakes. Always invest in properly managed, compliant stock.

Where can I find safe and profitable HMO investments?
At Foot Forward Properties, we specialise in high yield, fully managed and compliant HMOs. Every property we sell is ready to deliver income from day one and meets all current licensing and safety standards.