Do BRRR HMO Property Investments Still Work in 2026?

July 15, 2026

Yes, BRRR HMO property investments can still work in 2026. However, they do not work in every location, with every property or through every developer.

The strongest opportunities are generally found where the purchase price, refurbishment cost, local room demand, competing HMO supply, planning position, completed valuation and refinancing structure remain commercially aligned.

That distinction matters.

We regularly see people online claiming that BRRR no longer works. In some locations, that conclusion may be entirely correct. Property prices, refurbishment costs, planning restrictions and HMO competition may have moved too far for the numbers to remain attractive.

In other areas, however, the claim that BRRR is dead remains far from the truth.

At Foot Forward Property Investments, we speak from more than 34 years of experience and over 450 completed property developments. That experience has taken us through changing property cycles, interest-rate movements, construction inflation, new licensing schemes and increasingly detailed HMO standards.

What have we learned?

BRRR has not disappeared. It has become more selective, more regulated and far less forgiving of inexperienced property selection.

What does BRRR mean in HMO property investment?

BRRR commonly refers to:

• Buy a property with suitable development potential
• Refurbish it into a compliant and attractive HMO
• Rent the completed rooms to suitable tenants
• Refinance the property against its completed value and rental performance
• Repeat the process where commercially appropriate

The intended result usually involves creating value through substantial refurbishment and improved use of the property.

Following completion, an investor may refinance against the property’s new value. Part of the original capital may then be released, although this outcome should never be treated as guaranteed.

The amount available will depend on factors including:

• The lender’s valuation
• The chosen loan-to-value ratio
• The property’s rental assessment
• The investor’s personal or company circumstances
• The lender’s HMO criteria
• Interest rates at the time of refinancing
• The quality and legality of the completed development

A sensible BRRR project should not rely on every pound of the original investment being extracted.

Leaving some capital in a well-performing property may provide a safer long-term position than forcing the maximum possible refinance and weakening monthly cash flow.

Why are people saying BRRR no longer works in 2026?

Several genuine pressures have made BRRR HMO investment more difficult.

Property prices have increased in many locations. Labour, materials, professional services and compliance work also cost more than they did several years ago.

Higher-rate Stamp Duty Land Tax can add a significant acquisition cost for investors and companies purchasing residential property. The surcharge for additional dwellings was increased from three percentage points to five percentage points above the standard residential rates for qualifying transactions from 31 October 2024.

Private landlords must also operate within a changing regulatory environment. Major reforms under the Renters’ Rights Act 2025 came into force on 1 May 2026, including changes to assured tenancies and the abolition of Section 21 evictions.

Mandatory HMO licensing will generally apply where a property is occupied by five or more people, although local authorities may introduce additional licensing schemes covering other HMOs.

None of these changes automatically makes an HMO unviable.

They do mean that a superficial appraisal can become dangerous.

A 2026 HMO should not be assessed using only:

Purchase price + refurbishment cost compared with anticipated end value.

A credible appraisal should also account for acquisition tax, finance costs, legal fees, planning, building control, licensing, professional reports, furniture, development-period utilities, insurance, delays, voids, management, maintenance and ongoing compliance.

BRRR is not dead, but optimistic BRRR is struggling

In our experience, BRRR projects frequently become problematic when one or more of the following assumptions prove unreliable:

1. The property was purchased at too high a price.
2. The refurbishment budget excluded essential compliance work.
3. The projected room rents were based on the highest online listings rather than achieved local rents.
4. Existing HMO competition was underestimated.
5. The completed valuation was presented as a certainty.
6. Finance and holding costs were understated.
7. Planning permission was assumed rather than confirmed.
8. Gross rent was described as though it were net income.
9. The investor needed to recover every pound through refinancing.
10. The development agreement allowed open-ended cost increases.

A robust project should not require every assumption to produce the best possible outcome.

What happens when the valuation comes in 10% lower?

What if the refurbishment takes three months longer?

Could the property remain financially manageable with one empty room?

Would the investment still work if the achieved rent were below the initial projection?

The answers may reveal far more than an attractive headline yield.

Why location determines whether a BRRR HMO still works

The BRRR model depends on the relationship between the property’s total cost and the income or value that can reasonably be created.

A more expensive city may support higher rents. However, room rents do not always increase at the same rate as property prices, acquisition tax, construction costs and finance costs.

The latest available ONS release at the time of publication uses house price data to April 2026. It shows substantial differences between the markets frequently promoted to HMO investors.

Manchester’s average was approximately £247,000, while Liverpool’s was £184,000 and Leeds also averaged £247,000. By comparison, Doncaster averaged approximately £174,000 and Barnsley £173,000. Sheffield’s average stood at approximately £222,000.

London’s regional average was approximately £553,000 in April 2026, compared with £565,000 a year earlier.

These are broad market averages. They are not HMO valuations, room-rent evidence or guarantees of future growth.

They do, however, help demonstrate why the same development strategy may produce very different results in different locations.

Why a high-demand city can still be a poor HMO investment

Demand represents only one side of an HMO market.

Supply matters just as much.

A city can have a large student population, a growing professional workforce and strong rental demand while still containing neighbourhoods with excessive numbers of HMOs.

When too many landlords compete for the same type of tenant, several problems may follow:

• Rooms can take longer to let.
• Landlords may need to reduce rents.
• Incentives or discounted deposits may become necessary.
• Tenants can become more selective.
• Refurbishment standards may need to rise continually.
• Older HMOs may struggle against recently developed properties.
• Re-letting and advertising costs can increase.
• Valuers may take a more cautious view of projected income.
• Planning authorities may resist further HMO concentration.

This is where many investors misunderstand Manchester and Liverpool.

Both cities have significant rental demand. That does not mean every additional HMO is needed.

In some established HMO neighbourhoods, the greater commercial risk may be competition and oversaturation rather than a lack of tenants across the city as a whole.

Manchester: high demand does not remove the risk of HMO oversaturation

Manchester often appears attractive to HMO investors.

The city has major universities, employment centres, hospitals and a substantial private rented sector. These factors can support shared accommodation.

However, mature rental demand has also attracted a considerable amount of competing supply.

An investor entering an established Manchester HMO area may not be competing against one or two similar properties. They could be competing against entire streets of shared houses, professionally managed HMOs, new developments and purpose-designed rental accommodation.

Manchester City Council has Article 4 controls removing permitted development rights for changes from Class C3 dwellinghouses to Class C4 HMOs across the city. Planning permission is therefore required for such conversions.

The council’s evidence supporting its HMO controls documented established concentrations along parts of the Wilmslow Road and Oxford Road corridor, including areas associated with Fallowfield, Withington, Old Moat and Levenshulme.

This does not mean that every Manchester HMO investment will fail.

It does mean that an investor should not confuse citywide rental demand with unlimited demand for another similar room in a particular postcode.

The Manchester HMO competition test

Before purchasing, an investor should establish:

• How many existing HMOs operate within the immediate area?
• How many rooms are being advertised within a one-mile radius?
• How long have those rooms remained available?
• Are landlords reducing asking rents?
• Which bills and services are included?
• Are tenants choosing HMOs or purpose-built accommodation?
• Is the target market made up of students, graduates, contractors or established professionals?
• Does the property offer something meaningfully better than competing stock?
• Will planning permission be obtainable?
• Would the investment still work below the highest advertised room rent?

A strong city name cannot compensate for weak street-level research.

Manchester’s purchase price challenge

Manchester’s average house price was approximately £247,000 in April 2026. Average terraced-property prices were around £250,000.

Once higher-rate Stamp Duty Land Tax, professional fees, finance, planning risk and a substantial HMO refurbishment have been added, the total investment can become considerable.

To justify that cost, the investor may require:

• High room rents
• Consistently strong occupancy
• A favourable completed valuation
• Reliable refinancing
• Limited maintenance
• Continued tenant demand

Where the local market cannot support the required room rent, the development may look impressive while producing a disappointing return on the total capital invested.

Liverpool: a lower purchase price does not eliminate oversaturation

Liverpool requires a more nuanced assessment.

Its average house price was approximately £184,000 in April 2026, substantially lower than Manchester or Leeds. Average terraced-property prices were approximately £174,000.

That lower entry price may appear to create an obvious BRRR opportunity.

However, acquisition cost is only one part of the calculation.

In parts of Liverpool, the more significant issue may be the concentration of existing HMOs and the number of landlords targeting the same tenant market.

Liverpool’s adopted planning approach provides unusually clear evidence of this concern. In designated neighbourhoods where HMO concentration exceeds 10%, the council’s Policy H11 states that applications for additional small or large HMOs will not be supported. Below that threshold, applications are assessed against further criteria.

Liverpool’s Housing Strategy 2025 to 2030 also refers explicitly to areas at risk of becoming saturated by HMOs. The strategy describes selective licensing and Article 4 controls as tools for maintaining housing quality and a balanced mix of homes.

Planning permission is required for HMOs of three or more people within Liverpool’s relevant Article 4 areas. Large HMOs for seven or more occupants require planning permission more generally.

Those controls do not prove that Liverpool lacks rental demand.

They show why investors cannot rely on a simplistic argument such as:

Liverpool has students, therefore another HMO will let.

The commercial question concerns the balance between tenant demand and competing room supply in the specific neighbourhood.

What oversaturation can do to a Liverpool HMO

An oversupplied local market may create several financial consequences.

Lower achieved rents

The advertised rent may not be the rent ultimately agreed.

Where tenants have a large number of similar rooms to choose from, landlords may have to negotiate, include more services or accept a lower amount.

Longer void periods

A room producing no rent for six or eight weeks can materially affect annual cash flow.

Multiplying that risk across several rooms may reduce the actual return well below the headline forecast.

Higher specification expectations

In a competitive market, basic accommodation may not be enough.

Tenants may compare room size, en-suite facilities, furniture, communal space, broadband, parking, décor, energy efficiency and proximity to transport.

Maintaining competitiveness may therefore require further capital expenditure.

Greater tenant turnover

When many comparable rooms are available, tenants may find it easier to move at the end of a tenancy.

Frequent turnover can increase cleaning, maintenance, advertising and administration costs.

Restricted future development

Where a neighbourhood has already exceeded Liverpool’s planning concentration threshold, securing permission for an additional HMO may become considerably more difficult.

Pressure on refinancing assumptions

An anticipated valuation may rely on projected room income.

Where local supply is high, a valuer or lender may take a more cautious view of rent, occupancy or marketability.

Manchester and Liverpool should not be dismissed as entire cities

It would be inaccurate to state that every HMO in Manchester or Liverpool is oversaturated.

These are large and varied cities.

One postcode may contain a significant concentration of student HMOs. Another may have limited high-quality professional accommodation and demonstrable demand.

The appropriate conclusion is more precise:

In parts of Manchester and Liverpool, HMO competition and concentrated supply may represent a greater risk than the headline purchase price.

That risk must be investigated at street and tenant-profile level.

Citywide population growth, university numbers or rental demand cannot replace a local competition assessment.

Leeds: higher entry costs still require careful justification

Leeds continues to attract investors because of its universities, employment market, hospitals and regional economy.

Its average property price was approximately £247,000 in April 2026. Average terraced-property prices were approximately £205,000.

A Leeds HMO may still work where the property is purchased well, the planning position is suitable and the local tenant market supports the intended room rents.

However, the higher total investment must be justified by:

• Strong achieved room rents
• Reliable occupancy
• A credible completed valuation
• Sustainable operating costs
• Appropriate refinancing
• Sufficient margin for unexpected events

Demand should never be assessed without examining competing supply.

The same principle that applies to Manchester and Liverpool also applies to Leeds, Sheffield and every other established HMO market.

London and southern England: when the entry price becomes too high

London operates within a different acquisition-cost category from most regional markets.

With the average London property price at approximately £553,000 in April 2026, a building suitable for a substantial HMO conversion may require a much greater capital commitment.

Higher-rate Stamp Duty Land Tax, professional fees, finance costs, planning risk and refurbishment can push the total project cost considerably higher.

The rent required to justify that investment may then exceed what the intended tenant group is prepared to pay.

London can still contain viable HMO opportunities. However, the margin for error may be considerably smaller.

Similar challenges can arise in other expensive southern markets.

In parts of southern England, the combination of a high entry price and subdued recent capital growth may weaken the refinance case. It would not be accurate to describe every southern location as low-growth, however. Property performance varies significantly by town, neighbourhood and property type.

The correct question remains:

Does the income and completed value justify the total capital required for this particular property?

Why selected South Yorkshire markets can still work

We operate across selected parts of South Yorkshire because the relationship between purchase prices, development costs, rental demand and potential completed values can remain commercially attractive.

In April 2026, the average property price was approximately:

• £174,000 in Doncaster
• £173,000 in Barnsley
• £222,000 in Sheffield

Doncaster’s annual increase was approximately 4%, Barnsley’s was 5.6% and Sheffield’s was 3.4%, based on provisional ONS figures.

Those figures do not prove that every South Yorkshire property will make a suitable HMO.

They help explain why selected properties may still leave sufficient room between the acquisition cost and completed value to undertake a substantial refurbishment.

Lower acquisition prices can also reduce:

• Stamp Duty Land Tax
• Bridging interest
• Deposit requirements
• Total capital exposure
• The rent needed to support the project
• The financial impact of a lower-than-expected valuation

A property still needs to be selected carefully.

One street may support reliable professional demand. Another, only a short distance away, may not.

Transport, employment, parking, local amenities, broadband, room size, communal space, competing supply and management quality can all affect performance.

South Yorkshire does not mean regulation-free investing

Affordable property should not be mistaken for lighter regulation.

South Yorkshire contains several different Article 4 and planning arrangements.

Within Sheffield’s designated Article 4 area, planning permission is required to convert a Class C3 dwellinghouse into a Class C4 HMO for three to six unrelated occupants. Outside the designated area, the position may differ.

Doncaster has an HMO Article 4 Direction covering defined locations. Within those areas, a proposed conversion to an HMO requires planning permission.

Barnsley has a borough-wide Article 4 Direction removing permitted development rights for changes from Class C3 dwellinghouses to Class C4 HMOs.

This variation demonstrates why local knowledge matters.

An investor cannot assume that a property is suitable simply because another HMO operates nearby.

Planning, licensing, building control and fire-safety requirements should all be examined before an investor becomes legally committed to a purchase.

Planning permission and HMO licensing are not the same

Planning and licensing represent separate legal considerations.

Planning concerns the lawful use and development of the property.

Licensing concerns matters such as management, occupation, safety and amenity standards.

A property may therefore:

• Have the correct planning use but still require an HMO licence
• Sit outside an Article 4 area but still require mandatory licensing
• Meet national requirements but require additional work under local standards
• Have an existing licence that cannot simply be transferred to a new owner
• Require building-regulation approval for physical alterations

This distinction frequently causes difficulties for inexperienced investors.

A seller saying that a property “has been used as an HMO” does not prove that it has the correct planning status, licence or building documentation.

Evidence should be checked independently.

HMO competition should form part of every appraisal

Most BRRR appraisals focus heavily on the purchase price, refurbishment and end value.

Too few properly measure competition.

A competition assessment should include:

Existing HMO density

How many HMOs operate within the immediate neighbourhood?

Local licensing registers, planning records and council tax data may help, although no single source will necessarily provide a complete picture.

Current room availability

How many comparable rooms are being advertised?

Listings should be monitored over time rather than checked on a single day.

Time on the market

Has a room been listed for two days or two months?

An apparently high asking rent provides limited reassurance where the room remains empty.

Tenant type

A property aimed at students may face a different market from one intended for hospital staff, contractors or established professionals.

The design, location and management should reflect the intended tenant.

Quality of competing accommodation

How does the proposed HMO compare with existing rooms?

An investor should examine room size, en-suites, furniture, kitchens, communal areas, parking, broadband and energy efficiency.

Incoming supply

Existing competition is only part of the picture.

Planning applications, developments under construction and newly approved HMOs may add further rooms after the investor has completed their purchase.

Seasonal demand

Student-led markets may have pronounced letting seasons.

Missing the main intake period can leave a room empty for longer than originally anticipated.

Have HMO refurbishment costs increased?

Yes, HMO refurbishment costs have increased over time.

We do not claim that our own development costs have remained unchanged.

Labour, materials, professional services, energy-efficiency work and compliance requirements can all affect a refurbishment budget.

However, general inflation should not become a catch-all explanation for unexplained charges.

Some developers continue to attribute every increase to historic supply-chain problems or events that occurred several years ago. Investors should ask whether those explanations remain relevant to the current project.

A credible refurbishment proposal should include a detailed specification covering items such as:

• Structural and damp work
• Roofing and external repairs
• Electrical installation
• Plumbing and heating
• Fire doors and fire protection
• Alarm systems
• Insulation and ventilation
• Kitchens and communal areas
• Bathrooms and en-suite facilities
• Decoration and flooring
• Furniture and appliances
• External work
• Building-control requirements
• Licensing-related alterations

A “complete refurbishment” may mean very different things depending on the developer.

One project may involve little more than decoration, basic furniture and replacement flooring.

Another may include rewiring, new plumbing, structural alterations, fire protection, insulation, roofing, en-suites and extensive internal reconfiguration.

Comparing two headline refurbishment prices without comparing the scope of work can therefore be highly misleading.

Why our refurbishment costs can remain competitive

Economies of scale can materially affect development costs.

Our longstanding local contractor relationships, purchasing arrangements, repeat specifications and project-management experience allow us to deliver substantial HMO refurbishments competitively.

That does not mean cutting corners.

Our approach places emphasis on:

• Compliance
• Durability
• Tenant experience
• Practical management
• Long-term maintenance
• Sensible energy use
• An appropriate completed valuation

An HMO should not be designed only to look attractive in completion photographs.

It also needs to remain practical to heat, clean, inspect, repair and manage after tenants move in.

Our refurbishments may therefore be more substantial than lower-priced cosmetic packages, while still remaining competitively priced against many developer-led alternatives.

Investors should compare the actual specification rather than accepting any developer’s headline description, including ours, without supporting information.

Investors should not face unlimited refurbishment increases

An investor should be cautious where the developer controls the purchase, refurbishment, valuation assumptions and management arrangement but provides no clear protection against cost increases.

Useful questions may include:

• Is the refurbishment price contractually fixed?
• What happens if concealed defects are found?
• Who pays for cost overruns?
• Are payments linked to completed stages?
• Is the full specification attached to the agreement?
• Are furniture and appliances included?
• Are planning, building control and licensing costs included?
• Is there a defects period?
• Which figures are estimates?
• Which figures have been independently verified?

Unexpected defects can occur in older properties.

The commercial issue concerns who carries that risk.

An investor should not become an open-ended source of additional capital whenever a development problem arises.

Our HMO price lock promise

Foot Forward Property Investments offers a price lock promise on its HMO investments.

Under that promise, the agreed investment price does not increase because unexpected refurbishment items are discovered during development, subject to the written terms of the individual investment.

Our investors do not receive an unexpected demand for additional development money simply because we uncover an issue after work begins.

Very few developers provide that level of cost certainty.

A price lock cannot guarantee rent, occupancy, interest rates, valuations, taxation or refinancing. Those matters remain outside a developer’s control.

It can, however, remove one important source of uncertainty from the development process.

How to calculate whether a BRRR HMO stacks up in 2026

A proper appraisal should begin with the total amount required to acquire, develop and operate the property.

Total investment

Total investment = purchase price + Stamp Duty Land Tax + legal costs + finance costs + refurbishment + furniture + planning + building control + licensing + professional fees + holding costs

A contingency may also be required unless the agreed refurbishment price is protected by a genuine contractual price lock.

Net refinancing proceeds

Net refinancing proceeds = lender’s accepted valuation × approved loan-to-value ratio, minus lender, valuation and legal fees

The lender’s accepted valuation matters.

The developer’s anticipated valuation does not determine how much a bank will lend.

Capital remaining in the property

Capital remaining = total investment minus net refinancing proceeds

This figure helps an investor understand how much of their own capital remains tied up after refinancing.

Net operating income

Net operating income = gross rent minus operating expenses

Typical HMO operating expenses may include:

• Council tax
• Gas and electricity
• Water
• Broadband
• Management
• Insurance
• Maintenance
• Cleaning
• Gardening
• Licensing
• Safety inspections
• Void periods
• Replacement furniture
• Replacement appliances

Finance costs and taxation should then be considered separately.

A gross yield may provide a basic comparison. It does not show how much income the investor is likely to retain.

How oversaturation changes the calculation

Competition should be reflected directly in the financial model.

An investor could consider running at least three scenarios.

Where the project only works under the optimistic scenario, the margin may be too narrow.

This remains particularly important in established HMO areas of Manchester and Liverpool, where high tenant demand can exist alongside substantial competing supply.

What stress tests should an investor apply?

Before purchasing, consider the effect of:

• A completed valuation 10% below forecast
• A three-month development delay
• One room remaining empty
• Achieved rent being lower than advertised comparables
• Higher utility costs
• Increased maintenance
• A lower refinancing loan-to-value ratio
• A higher interest rate
• Additional planning conditions
• Delayed licensing
• Greater local HMO competition
• New competing developments entering the market

A project that becomes unmanageable after one modest change may not contain enough margin.

Why more regulation makes experience increasingly important

HMO development requires more than construction experience.

A knowledgeable developer should be able to assess:

• Whether the property can lawfully operate as an HMO
• Whether Article 4 applies
• Which planning permission may be required
• Which licensing scheme applies
• Whether the layout meets local amenity standards
• How fire safety will be addressed
• Whether building-control approval is required
• Which tenant group suits the location
• What rents are currently being achieved
• How much competing HMO supply exists
• How the property will be managed after completion
• What evidence may support the valuation
• Which risks remain with the investor

With more than 34 years of experience and over 450 properties developed, we have extensive first-hand knowledge of these issues.

We operate within the markets where we develop and manage properties.

That local experience helps us identify the differences between an apparently inexpensive property and a genuinely suitable HMO opportunity.

Experience should still be tested rather than accepted as a marketing statement.

Investors should review completed projects, speak with the people responsible for delivery, examine the proposed specification and obtain independent legal, tax, valuation and mortgage advice.

What should an investor look for in an HMO developer?

A credible developer should be prepared to provide clear answers about:

• Planning and Article 4
• Licensing
• Building control
• Fire safety
• Refurbishment scope
• Cost-overrun responsibility
• Local HMO competition
• Achieved room rents
• Management costs
• Valuation evidence
• Refinancing risks
• Post-completion management

They should also distinguish clearly between:

• A projection and a guaranteed result
• An advertised rent and an achieved rent
• A developer’s estimated value and a lender’s valuation
• Gross income and net cash flow
• A cosmetic refurbishment and a substantial development
• Citywide demand and street-level demand

Investors should be treated as long-term commercial partners, not as unlimited sources of development funding.

Does partnering with an experienced developer remove all risk?

No.

An experienced developer may reduce avoidable planning, construction, compliance and management errors.

They cannot remove all investment risk.

Property values can fall. Interest rates can change. Lender criteria can tighten. Rental demand can move. Competing supply can increase. Legislation and taxation may also change.

A responsible developer should provide:

• A clear process
• Evidence-based assumptions
• Transparent costs
• A detailed specification
• Realistic risk disclosure
• Appropriate contractual protection
• Honest explanations of what could go wrong

No responsible HMO developer should guarantee capital growth, refinancing or investment returns.

So, do BRRR HMO property investments still work in 2026?

Yes, BRRR HMO investments can still work in 2026, but the right location, property, specification and delivery partner have become essential.

A BRRR HMO may still stack up where:

• The property is purchased at a commercially sensible price.
• The local market supports the intended tenant profile.
• Existing and incoming HMO competition has been assessed.
• Planning and licensing have been checked.
• The refurbishment specification is substantial and transparent.
• Development costs remain proportionate to the completed value.
• Room rents are supported by achieved local evidence.
• Operating expenses are included.
• The project remains manageable after stress testing.
• Refinancing assumptions are realistic.
• The investor and developer have aligned interests.

The strategy may be considerably less attractive where property prices, refurbishment costs and competing supply require room rents that the local tenant market will not support.

That difficulty can be found in parts of London, Manchester, Leeds and Liverpool.

Manchester and Liverpool present a particularly important lesson.

A city can contain considerable rental demand while individual HMO neighbourhoods become heavily competitive or oversupplied.

In Liverpool, the council’s 10% concentration policy and its direct reference to areas at risk of HMO saturation show why investors should not assume that another HMO will automatically be welcomed or commercially successful.

In Manchester, citywide Article 4 controls and documented HMO concentrations mean that planning and competition must form part of the appraisal from the beginning.

Why we continue to develop BRRR HMOs in South Yorkshire

We continue to find workable opportunities in selected parts of South Yorkshire because entry prices can remain accessible relative to the potential completed value.

Our local teams, supplier relationships, development experience and knowledge of tenant demand also help us manage variables that frequently cause remote or inexperienced developments to fail.

Our approach includes:

• More than 34 years of property experience
• Over 450 completed property developments
• Substantial HMO refurbishments
• Detailed local due diligence
• Compliance-led design
• Local competition analysis
• Professional tenant targeting
• Development and management experience
• Competitive refurbishment pricing
• A price lock promise
• Clear disclosure that projections are not guaranteed

The simple answer remains that BRRR HMO investment can still work in 2026.

What no longer works reliably is indiscriminate purchasing, superficial refurbishment, unchecked HMO competition, optimistic valuations and the belief that rising rents will correct every mistake.

The right property, purchased at the right total cost, in the right micro-market and developed to the right standard may still create a compelling long-term HMO investment.

You can view our current HMO properties for sale in South Yorkshire and review the development, refurbishment and investment information associated with each opportunity.

Frequently asked questions

Do BRRR HMOs still work in the UK in 2026?

BRRR HMOs can still work where the total acquisition and development cost remains supportable by the completed value and net rental income. Planning, licensing, refinancing, operating costs and local competition should all be assessed before purchase.

Is the BRRR property strategy dead?

The strategy itself is not dead. Projects based on inflated valuations, incomplete budgets, unsustainable rents or inadequate competition research have become much harder to justify.

Is Manchester oversaturated with HMOs?

Manchester should not be described as uniformly oversaturated. Some established HMO neighbourhoods contain substantial competing supply, however. Manchester’s citywide Article 4 controls also mean that planning permission is required for C3 to C4 HMO conversions. Each postcode and tenant market should be assessed individually.

Is Liverpool oversaturated with HMOs?

Some Liverpool neighbourhoods have significant HMO concentrations. Liverpool’s planning policy states that additional HMO applications will not be supported in designated areas where concentration exceeds 10%. The council’s housing strategy also refers to neighbourhoods at risk of HMO saturation.

Can Liverpool still offer viable HMO investments?

Potentially, yes. Liverpool’s lower average property price may support some projects. The investment should still be tested against local competition, planning policy, achieved rents, tenant demand, refurbishment costs and the completed valuation.

Does strong tenant demand protect an investor from oversaturation?

No. Strong demand can coexist with excessive supply. Where too many similar rooms compete for the same tenants, landlords may experience lower achieved rents, longer voids, higher tenant turnover and increased pressure to upgrade the property.

Is South Yorkshire a good area for HMO investment?

Selected South Yorkshire locations may provide an attractive relationship between acquisition prices, development costs and professional tenant demand. Performance varies by property, street and tenant profile. Planning, licensing and competing supply still require careful investigation.

Does Article 4 ban new HMOs?

Article 4 does not automatically ban HMOs. It removes the permitted development route for specified changes of use, meaning that planning permission must be obtained. The application will then be assessed against relevant local planning policy.

Can an investor withdraw all their original money when refinancing?

Possibly, but never with certainty. The amount available depends on the lender’s valuation, loan-to-value limit, rental assessment, lending criteria and the investor’s circumstances.

Have HMO refurbishment costs increased?

Yes. Labour, materials, compliance and professional costs have increased over time. Investors should compare complete specifications rather than headline refurbishment prices.

Why are some HMO refurbishment quotations so expensive?

Prices may reflect different specifications, locations, contractor arrangements, compliance requirements and commercial margins. Some developers may also pass extensive contingencies or cost-overrun risk to the investor. A detailed, itemised specification provides a better comparison than a single headline figure.

What is the Foot Forward price lock promise?

Our price lock promise means that the agreed investment price does not increase because unexpected refurbishment issues are discovered during development, subject to the written terms of the specific investment. It does not guarantee rents, valuations, interest rates or refinancing.

Are HMO investment returns guaranteed?

No. Rental income, occupancy, operating costs, interest rates, regulation and property values can change. Forecasts should be treated as projections rather than guaranteed outcomes.

Investment risk notice

This article provides general educational information and does not constitute financial, investment, mortgage, legal, planning or tax advice.

Property investment involves risk. Property values and rental income can rise or fall. Rooms may remain vacant, costs may increase and refinancing may not be available on the anticipated terms.

Investors should obtain independent legal, tax, financial, planning and mortgage advice before purchasing an HMO or entering into a property-development agreement.