What North England cities have high demand and rentals for HMO properties?

September 7, 2026

Foot Forward Property Investments are experts in HMO investment in North England. For over 34 years, we have specialised in selling fully managed HMO developments. We are not a sourcer or a deal packager. We are the direct developer who builds and then manages HMO property investments for investors, focusing solely on the North of England and, more specifically, South Yorkshire.

For the professional HMO investments that we develop, we believe South Yorkshire is the leading place for HMO investors in the North of England. That opinion has not been formed after completing a property course, looking at Rightmove for an afternoon or finding somewhere with cheap terraced houses. It comes from 34 years of developing and managing HMO properties and seeing what actually happens after the investor has bought the property.

Thankfully, the days of HMO properties being promoted almost entirely as an overleveraging exercise appear to be disappearing. A lot of the questionable developers and online property gurus who pushed the “all money out” HMO model have moved onto the next floggable course, strategy or property method. Serious investors now understand that HMOs are not a get rich quick scheme. They are regulated rental properties that can create excellent long-term income when they are bought correctly, developed properly, sensibly financed and professionally managed.

That is exactly why so many investors come directly to us to build and manage HMO portfolios for them. We develop the property and remain responsible for managing it afterwards. We cannot simply put an optimistic rental figure on a spreadsheet, collect a sourcing fee and disappear.

We appreciate that recommending South Yorkshire might sound like we are blowing our own trumpet. We genuinely mean what we say, though, and we think a 34-year track record developing and managing HMOs says considerably more than a marketing brochure ever could.

Manchester and Liverpool have lost a lot of their HMO appeal

Manchester and Liverpool were two of the biggest beneficiaries of the HMO investment boom. Investors chased the trophy city names, developers followed them and enormous amounts of shared accommodation appeared.

A considerable part of the traditional HMO market in both cities has also been geared towards students. That dependence is now a problem.

For years, the basic argument was simple. Manchester and Liverpool have huge universities, therefore there will always be endless numbers of students looking for rooms. The flaw is that university enrolment does not automatically equal private HMO demand.

More students are choosing to live at home while studying. UCAS reported that 31% of UK 18-year-olds accepted into university or college in 2025 intended to live at home, compared with 22% a decade earlier. That represented 89,510 young people.

The reason is hardly difficult to understand. The cost of living has increased substantially and moving away to university means adding rent, bills, food and transport to an already expensive degree. If somebody can attend university while remaining at their parents’ home, increasing numbers are looking at the numbers and deciding that paying hundreds of pounds every month for a bedroom simply does not make financial sense.

That matters enormously to a student HMO landlord.

A university can have tens of thousands of students, but the number that matters to a landlord is how many of them actually need privately rented accommodation. Somebody living with their parents contributes absolutely nothing towards filling an HMO bedroom.

Manchester’s larger student houses have already shown why landlords cannot automatically assume that rents will keep marching upwards. Accommodation for Students reported average advertised rents of £152 per week in Manchester properties with four or more bedrooms in July 2026, 2% lower than the previous July.

Then came the Renters’ Rights Act.

Since 1 May 2026, most private student house shares in England have moved onto assured periodic tenancies rather than the traditional fixed-term arrangements that tied students into a property for an academic year. Students can generally leave by providing the required notice.

That changes the economics of the traditional student HMO.

If a student can find a perfectly acceptable room nearby for less money, the landlord has far less ability to rely on that tenant remaining there simply because they signed an agreement months earlier. Price matters more. Competition matters more. The quality of the accommodation matters more.

For landlords operating in heavily supplied student areas, that is not a small change.

Liverpool also has some extraordinary concentrations of HMOs. Liverpool City Council’s housing monitoring information recorded concentrations of around 42% in Kensington Fields and 37% in the Dales in 2024. When such a large proportion of properties in a neighbourhood are competing within the shared accommodation market, we simply do not see why an investor should be desperate to add another one.

Manchester has had citywide Article 4 HMO controls since 2011, while Liverpool also has Article 4 restrictions covering HMO conversions in designated areas. Article 4 did not arrive because councils were desperately trying to encourage thousands more HMO conversions.

The boom happened. Investors piled in. HMO concentrations increased and planning controls followed.

We have also watched developers who previously concentrated heavily on conventional HMOs become increasingly dependent on social housing and “guaranteed rent” propositions. Some have pivoted considerably towards social housing as the conventional HMO proposition became harder to sell.

We think that says an awful lot.

If an area supposedly remains fantastic for professional or student HMOs, why does the investment suddenly need a social housing provider to make the numbers work?

Social housing is an entirely different investment model. It should never be used as a sticking plaster because an investor bought an HMO in an oversupplied market and cannot achieve the professional or student rents originally promised.

For the type of professional HMO portfolio we develop, we simply would not send our investors chasing Manchester or Liverpool.

The North East cheap HMO trap

Newcastle, Hartlepool, Sunderland and Durham have attracted a similar problem for a different reason.

Cheap houses.

For years, property deal packagers and online gurus have been able to produce very attractive-looking spreadsheets in the North East because the starting property price is low. Buy a cheap terraced house, insert an optimistic refurbishment figure, assume top-of-the-market room rents, predict a generous commercial valuation and suddenly the spreadsheet produces an incredible return.

The spreadsheet is the easy bit.

Actually delivering it is considerably harder.

The refurbishment that was supposed to cost very little suddenly costs what a proper HMO refurbishment actually costs. The premium room rents printed in the brochure prove difficult to achieve. The valuation does not come back where expected and the “all money out” BRRR deal stops being all money out.

By the time the investor has finished the project, another four HMOs may have appeared around the corner because another four investors were sold exactly the same story.

Everybody is then chasing the same tenants.

This is why buying somewhere purely because houses are cheap is such a poor way to choose an HMO market. Cheap property can exist for a reason. Local wages, deprivation, employment patterns, rental affordability and competing accommodation all matter.

Putting £700 per month into a spreadsheet does not mean somebody locally is going to pay £700 per month.

Durham is another example of where HMO expansion has resulted in tighter planning controls. County Durham extended Article 4 HMO controls across the remainder of the county from August 2026. Again, that should make investors think about what has happened to HMO supply rather than treating another inexpensive terraced house as an automatic opportunity.

Newcastle and Sunderland also have established HMO Article 4 areas.

We would rather avoid the situation entirely. Our investors do not need us experimenting with their capital in locations where the investment argument starts with “look how cheap the house is.”

Hull, Goole and Grimsby tell a familiar story

Hull, Goole and Grimsby follow much the same pattern.

Low property prices attract deal packagers. Low property prices make gross yields look enormous. Optimistic refurb costs make the return look better again, and ambitious rental projections finish the spreadsheet off nicely.

Then the investor has to own the thing.

Competition between landlords matters considerably more than the gross yield printed on page one of a brochure. If numerous landlords are offering broadly similar bedrooms to the same tenant market, somebody eventually competes on price.

An investor then discovers that the 13%, 14% or 15% gross yield used to sell the deal was never particularly useful in the first place because the rooms are not consistently producing the assumed rent.

Hull has also experienced HMO concentrations significant enough to result in planning controls and specific HMO planning policies.

We are not interested in joining the race to the bottom simply because the purchase price looks attractive.

Barrow-in-Furness and the next cheap-area bandwagon

Barrow-in-Furness has also become increasingly popular in HMO investment circles, usually accompanied by references to BAE Systems and the employment created by the submarine programme.

Yes, BAE Systems is a substantial employer. That does not mean every terraced house in Barrow suddenly becomes a fantastic HMO investment.

A major employer is one piece of the demand picture. It does not remove competition, guarantee premium rents or mean every employee wants to live in an HMO.

We have seen this logic before. A location becomes fashionable because property is inexpensive, somebody identifies a major local employer, deal packagers start promoting it, investors pile in and eventually there are considerably more landlords competing for the same pool of tenants.

We would put our investors’ money somewhere else.

Aberdeen? Don’t even go there

Now Aberdeen appears to be becoming another favourite amongst investors chasing cheap HMO property.

We have absolutely no interest in following that bandwagon.

The sales pitch sounds remarkably familiar. Property is cheap, therefore the spreadsheet looks fantastic. People then start talking about Aberdeen as though nobody else has noticed the same inexpensive houses.

This is exactly how overcrowded investment markets begin.

Just because a property is cheap does not mean investors should flock there. We have already watched variations of this story play out across parts of the North East.

Changing the city does not improve the strategy.

That leaves Yorkshire

Once we rule out the markets we do not like across much of the North West, North East and some coastal towns, our attention comes back to Yorkshire.

Even within Yorkshire, though, we are very selective.

I am Tom Abram, the person writing these blogs, and I live in Wakefield. We do not automatically develop HMOs in central Wakefield simply because it is Yorkshire.

In fact, we rule a lot of central Wakefield properties out.

The typical houses we assess can be too small for the standard we want to create. Parking is often poor, gardens can be limited and making every bedroom ensuite without destroying the communal space can be difficult.

Could somebody turn some of these houses into an HMO? Of course.

Would we consider them fantastic HMOs? No.

Squeezing bedrooms into a property and ticking the minimum boxes is not how we develop. A cramped HMO with shared bathrooms and very little useful communal space gives tenants plenty of reasons to move when something better becomes available.

Tenant turnover then becomes the landlord’s problem.

The Wakefield-area properties we do buy tend to be closer to the Wakefield and Doncaster border, where we can find larger houses for sensible money with gardens, better parking and enough internal space to create comfortable ensuite bedrooms.

That produces a completely different HMO.

Doncaster is the gem

Now we get to Doncaster.

Hopefully, after reading everything above, it is clearer that we are not simply saying Doncaster is fantastic because that happens to be where Foot Forward develops a lot of its HMO properties. We are perfectly willing to explain why we avoid other markets, including areas on our own doorstep.

We genuinely believe Doncaster is one of the leading locations for professional HMO investment in the North of England.

Thirty-four years of developing and managing HMOs here has taught us an enormous amount. More importantly, Doncaster has continued to provide a viable professional HMO market throughout that period.

If the market had stopped working, we would have known about it rather quickly because we manage the properties after developing them.

We would not have survived 34 years doing this if we repeatedly built houses that investors could not rent.

Doncaster has also grown without becoming the sort of HMO bubble that developed in parts of Manchester and Liverpool. We can still find suitable properties in areas where professional tenant demand exists without having another HMO on every other street.

That balance is extremely important.

Doncaster does not depend on students

This is one of the biggest differences between Doncaster and the student-led HMO markets we have discussed.

Our professional HMO properties are not dependent on thousands of students arriving every September.

Doncaster has a broad employment base.

iPort is home to major employers and logistics operations including Amazon and Lidl. Doncaster also has established rail, engineering, warehousing, manufacturing and distribution employment, while Unity continues to bring further investment into the area.

The TJ Morris distribution centre at Unity is expected to support up to 1,000 jobs as the development progresses.

These are the sorts of employment centres that produce the working tenants our HMOs are designed for.

We would much rather have an HMO market supported by people working across logistics, rail, engineering, manufacturing, warehousing, healthcare and other industries than depend overwhelmingly on whether an 18-year-old decides to move away to university this year.

Professional tenants need somewhere comfortable and affordable to live throughout the year.

That is the market we concentrate on.

Connectivity matters

Doncaster’s position is another reason major logistics companies choose to operate here.

The M18, A1(M), M1 corridor and wider motorway network provide excellent access across the country. Doncaster sits on the East Coast Main Line with direct rail services towards London, Leeds, York and other major employment centres.

A significant proportion of the UK can be reached easily from Doncaster, which is exactly why enormous distribution and logistics businesses have invested in the area.

For an HMO landlord, the important part is what that connectivity does to the available tenant market. A tenant does not necessarily need to work half a mile from the property. Good transport connections expand the number of workplaces that can realistically be reached from home.

HMO saturation remains far more sensible

We also prefer Doncaster because we can still select neighbourhoods without the level of HMO saturation that puts us off Manchester, Liverpool, parts of Leeds, Sheffield and Newcastle.

That does not mean every Doncaster property makes a good HMO.

Far from it.

We reject properties here regularly because the road is wrong, parking is poor, the internal configuration does not work or the numbers simply do not justify the development.

Our 34 years in the area allow us to be extremely selective.

We know what sort of houses tenants respond to, what locations perform and what type of property becomes difficult to manage later.

That knowledge is considerably more valuable to an investor than buying whichever property happens to appear cheapest on Rightmove.

The Doncaster deal still works on a NET yield

One of the clearest signs that the HMO investment case in Doncaster remains strong is that we can still sell the investment based on its NET yield.

We do not need to hide behind an enormous gross percentage.

This is something investors should pay considerably more attention to when comparing HMO investments around the country. In weak or oversupplied locations, it is common to see the headline dominated by gross yield because the gross number looks fantastic.

It might say 13%, 14% or even higher.

Lovely.

Now start taking the bills off.

Utilities, council tax, broadband, management, maintenance, cleaning where applicable and allowances for vacant rooms all have to be paid somewhere. Suddenly that enormous gross yield starts looking considerably less exciting.

Then consider whether the projected rent was realistic in the first place.

Our Doncaster investments still work when we show investors what remains after the normal property running costs included in our net calculation have been deducted. We do not need to inflate the room rents or break the local rental ceiling to make the investment look viable.

For example, one of our five-bedroom, five-bathroom Woodlands HMO developments has a total investment figure of £287,375 including the property, refurbishment and furniture. Its published projection provides £26,400 of annual net income, producing a 9.19% NET yield on a cash purchase before the investor’s own borrowing costs and tax.

That is the sort of figure we would rather discuss.

If an investment only becomes impressive when somebody switches the spreadsheet from NET yield to gross yield, we would question how impressive the investment really is.

Sensible property prices still leave room for growth

Doncaster also sits in a useful position between affordability and capital appreciation.

Property prices have been rising, but they have not reached the stage where the acquisition cost destroys the HMO yield.

The Office for National Statistics reported an average Doncaster house price of £171,000 in June 2026, with annual growth of 4.4%. The Yorkshire and Humber average was £208,000.

That affordability is one reason we can still buy the larger houses we need, carry out substantial refurbishments, add ensuite bathrooms, improve communal spaces and deliver a finished HMO at an investment level that can generate an attractive NET return.

We do not need capital appreciation to rescue a weak rental investment.

The income should work first.

Capital growth then becomes another part of the long-term return for an investor who has bought sensibly rather than overleveraging themselves based on an optimistic future valuation.

We have never needed to abandon professional HMOs

Foot Forward now develops Children’s Care Homes, SEND schools and Adult Residential Care properties as well as HMO investments.

What we have not done is abandon HMOs.

We have continued developing professional HMO properties throughout our 34-year history because the model still works in the areas we choose.

We have not needed to suddenly turn our HMO stock into social housing because the original tenant market disappeared. We have not needed to abandon the sector and start selling new-build apartments because there were too many HMOs competing for tenants.

Our professional HMO business continues alongside our care developments.

That says an awful lot about why we remain so selective over location.

We develop the property, we manage the property and we therefore experience the consequences if we get the location wrong. Investors who buy through us are not being handed a property and left to work out what happens afterwards.

If you are looking for a fully managed HMO investment in the North of England and want to see the properties we are currently developing, visit www.footforwardproperties.co.uk/hmo-for-sale.