Is Buying HMOs at Auction a Good Idea?

September 23, 2025

HMO living room - furnished

When it comes to investing in houses in multiple occupation many landlords and investors look at property auctions as a way to secure a deal. The excitement of the auction room coupled with the potential of picking up a bargain often makes this route appealing. But is buying HMOs at auction a good idea

The short answer is that whilst there are opportunities, caution is essential. We have spoken with a fair few investors who thought they had bought a compliant HMO at auction only to later discover that the property was non compliant and money draining. Once the hammer falls at an auction the sale is legally binding, and if you have not done your due diligence you could be left with a property that fails to meet HMO regulations and costs more to fix than you had ever budgeted for.

Why due diligence matters when buying HMOs at auction

Auction houses can be great places to find property, but they are also environments where sellers look to move property on quickly. Increasingly we are seeing questionable landlords offloading their non compliant HMOs through auctions because they know their properties do not meet regulation and want to shift the risk onto the buyer. Many auction catalogues describe these as “add value opportunities” but the auction house often does not have the full picture. Remember, their commission comes from selling the property, not from ensuring the compliance of the property.

This is why thorough due diligence is critical. Before you even consider bidding on an HMO at auction you should investigate licensing requirements, fire safety measures, room sizes, planning restrictions and the property’s compliance with local authority standards. Without this knowledge you could end up with an HMO that drains your resources and limits your ability to generate returns.

Are all auction houses the same

Not at all. There are some excellent auction houses that act transparently and provide detailed packs. However, our concern is the increasing number of investors getting their fingers burnt because they placed too much trust in the marketing material provided. The phrase “buyer beware” has never been more important than when it comes to HMOs at auction.

Who we are and how we are different

At Foot Forward Properties we are not a sales house pushing any HMO that comes across our desk. We are a leading HMO developer and management firm. Whilst we do sell HMO properties, we only sell HMOs that we have developed ourselves. This allows us to provide our compliance guarantee and our price lock promise so that investors can be confident in what they are buying.

If you are interested in purchasing a compliant HMO that is designed to meet regulations from the ground up, you can view our available opportunities here: HMO Properties for Sale.

Final thoughts

So is buying HMOs at auction a good idea It can be if you know exactly what you are doing and have carried out your due diligence in advance. But for many, the risks outweigh the rewards, especially given the increase in non compliant HMOs being pushed through auctions by landlords who want to pass on their problems. If your goal is a stable, compliant, income generating HMO then working with a specialist developer and management firm may be a safer and smarter option

Frequently Asked Questions About Buying HMOs at Auction

What should I check before buying an HMO at auction
Before bidding you should check whether the property has the correct HMO licence, complies with fire safety standards, meets minimum room size requirements, and is in line with local planning and housing regulations. Always read the legal pack carefully and, if possible, carry out a survey.

Are HMOs at auction usually compliant
Not always. Many landlords use auctions to sell non compliant HMOs quickly. Some may be marketed as “add value opportunities” but in reality they can require significant investment to bring up to standard.

Why do landlords sell HMOs at auction
Auctions are fast sales environments. Landlords who know their properties do not meet current regulations often use auctions to pass on the problem to an unsuspecting buyer.

Are all auction houses risky when buying HMOs
No. There are some very good auction houses that provide clear information. However, many focus on the sale rather than compliance, so it is important to take responsibility for your own due diligence.

Is buying an HMO at auction a good investment
It can be if you are experienced and understand the risks. However, many investors have ended up with costly, non compliant properties. Working with a specialist HMO developer who provides compliance guarantees is often a safer choice.