Best Places to Buy HMO Properties in the UK in 2025
July 14, 2025
As the UK property market evolves in 2025, investors are increasingly focused on high-yield opportunities with strong capital growth. Houses in Multiple Occupation (HMO) continue to be one of the most attractive strategies, offering significantly higher rental returns than single lets. However, not all regions offer the same level of performance or sustainability. In this article, we explore the best places to buy HMO properties in the UK and highlight why South Yorkshire, especially Doncaster, stands out as a gold mine for serious investors.
Why HMO Properties in the South of England No Longer Stack Up
Historically, the South of England has been seen as a safe bet for property investment. However, in 2025, the numbers simply do not make sense for most HMO investors. Property prices are prohibitively high, rental yields are stagnant, and tenant demand is increasingly mismatched with pricing. Areas like London, Surrey, and parts of Hampshire see minimal capital appreciation and have reached a ceiling in terms of rent growth. This combination makes the South less attractive for yield-focused strategies like HMOs.
Manchester and Liverpool: Oversaturation is Limiting Returns
Manchester and Liverpool were once the go-to destinations for high-yield HMO investments. Unfortunately, these cities have become oversaturated. With thousands of investors rushing in over the past five years, property prices have surged, eroding the rental yields that made them attractive in the first place. Today, demand is high, but competition is fiercer than ever, making it difficult to secure properties at a price point that delivers a viable return. Net yields are dropping, and unless you have significant capital or access to off-market deals, the opportunities are increasingly scarce.
Newcastle: High Hopes but Limited Tenant Demand
Newcastle has recently caught the attention of property sourcers promising top-tier returns and cheap entry points. While prices are relatively low and yields look promising on paper, the tenant demand in many areas of Newcastle does not support long-term sustainability. Investors are often drawn in by headline figures, only to find longer void periods and difficulties in maintaining consistent occupancy. This undermines the core value proposition of an HMO investment, which is stability and predictability of income.
Doncaster and South Yorkshire: The Hidden Gem of HMO Investment
Doncaster and the wider South Yorkshire region have quietly become one of the most lucrative areas in the UK for HMO investment in 2025. What makes Doncaster so appealing is a combination of factors that are rarely found together in one location.
1. Affordable Property Prices with Strong Growth
While prices are rising steadily, they remain well below the national average, allowing investors to enter the market without overleveraging. This affordability creates excellent conditions for high rental yields and capital appreciation. Doncaster is currently leading the UK in capital growth for comparable regions, driven by a combination of government regeneration and private sector investment.
2. Impressive NET Yields
HMO properties in Doncaster are regularly achieving NET yields of over 9.5 percent. When combined with capital appreciation exceeding 7 percent, the long-term return potential is exceptional. For investors seeking both cash flow and growth, Doncaster is hard to beat.
3. Massive Economic Investment and Job Creation
Major employers such as Siemens, Amazon, and IKEA have poured millions into the region, bringing jobs and a growing professional tenant base. This influx of employment opportunities increases tenant demand and makes HMOs a sustainable long-term investment model.
4. Excellent Transport Links
Doncaster boasts outstanding transport connectivity. Located near the A1 and M18 motorways and with a mainline railway station offering direct trains to London in under two hours, the town is perfectly positioned for commuters and logistics hubs. This further strengthens its appeal as a place to live and invest.
Hands-Free HMO Investing with Foot Forward
For investors seeking a completely passive experience, Foot Forward offers a fully hands-free service that takes care of every step of the HMO investment process. From sourcing and refurbishing properties to tenant management and compliance, Foot Forward ensures you earn strong returns without the day-to-day hassle. Properties sourced by Foot Forward regularly generate over 9.5 percent NET yields and benefit from capital appreciation above 7 percent, making this one of the most competitive offerings in the UK market today.
Final Thoughts
While popular areas like London, Manchester, and Liverpool may dominate headlines, the best returns in 2025 are found in overlooked and underappreciated markets. Doncaster and South Yorkshire represent a rare blend of affordability, tenant demand, infrastructure investment, and economic growth. For investors serious about building long-term wealth through HMO property, this region offers unmatched opportunity.