Where to buy an HMO in the North?

February 19, 2026

Buying an HMO in the North of England can be an excellent strategy for investors who want resilient rental demand and the potential for long-term growth. But the North is not one “market”, it’s dozens of micro-markets with different tenant profiles, planning dynamics, pricing pressures, and levels of competition.

At Foot Forward Property Investments, we’ve spent 34 years assisting investors to develop and then manage completely hands free properties across the North of England. Over that time, one lesson has stayed consistent: the best HMO locations are rarely the loudest ones online.

This guide explains where demand is strongest right now, why some headline cities can be harder to make work in practice, and why South Yorkshire remains one of the most compelling regions for HMO investors when you assess the fundamentals properly.

Start with the fundamentals, not the headlines

Before choosing a location, it helps to define what “best” actually means for an HMO investor. In most cases, you’re looking for a balance of:

  • Purchase price vs achievable room rents (viability)

  • Depth of tenant demand (not just one tenant type)

  • Local job growth and wage trends

  • Connectivity and commuter flow

  • Amenities and lifestyle pull (which supports stable occupancy)

  • Saturation and competition (how many HMOs are already chasing the same tenants)

  • Capital appreciation potential (not guaranteed, but important for long-term outcomes)

  • Regulatory and licensing reality (how smoothly the model can operate)

When you evaluate areas through that lens, the “top 4” city list often needs a reality check.

The popular picks, and the issues investors are reporting back

A lot of places online point to Manchester, Liverpool, Newcastle, and Leeds as the top HMO markets in the North. They are major cities with universities, employers, and transport links, so the logic is understandable.

However, what we are hearing from our investors, and from investors coming to us, is that these markets are not always the best fit for today’s HMO investor, especially if you want strong yields without operational headaches.

Manchester: strong city, but viability is tougher in many areas

Manchester’s growth story has been well-publicised for years, and that visibility has consequences.

What investors are increasingly running into:

  • Property prices are often too high to keep the numbers attractive once you factor in refurb costs, compliance, and professional management.

  • Saturation and competition can be intense in popular postcodes, which can pressure room rates or increase void periods.

  • Tenant expectations can rise with the city’s “premium” positioning, which can increase furnishing and maintenance standards.

Manchester can still work, but it often becomes a specialist game of buying extremely well, executing perfectly, and being comfortable with tighter margins.

Leeds: high demand, but pricing and competition can squeeze returns

Leeds is another strong northern city, but similar challenges are showing up for HMO investors:

  • In some areas, purchase prices have climbed faster than achievable room rents.

  • Competition is heavier, meaning marketing, pricing, and tenant quality become more sensitive.

  • The best-performing micro-locations are well known, which can lead to bidding pressure.

Liverpool: established market, but many investors feel the easy wins are gone

Liverpool remains a major economic and cultural hub. The challenge many HMO investors now report is:

  • High competition in the usual “go-to” HMO zones

  • Saturation in certain pockets, which can create price sensitivity among tenants

  • In several areas, property prices can be too high to make the model viable compared with alternative regions offering similar demand but better entry pricing

Newcastle: affordability helps, but growth factors matter

Newcastle can look attractive on paper due to relatively affordable property. But the concerns we hear relate to fundamentals that drive long-term stability:

  • Job growth is smaller in some areas compared with other regions

  • Regeneration is smaller in many pockets

  • Wages can be lower, which can cap rent growth and affect affordability dynamics for professional tenants

Again, Newcastle can work in the right micro-markets, but investors should be careful about assuming that a low purchase price automatically equals a strong investment.

Why South Yorkshire remains a strong HMO investment region

When you put the fundamentals side-by-side, South Yorkshire consistently stands out for a blend of affordability, demand depth, and practical HMO viability.

From our perspective, it’s not theoretical. We have operated and developed HMOs here for over 24 years, which directly addresses one of the biggest risks investors worry about: competition and saturation. Experience matters because good HMO performance is often built on execution and local knowledge, not just a postcode.

1) A more workable price-to-rent relationship

One of the clearest advantages is entry pricing that can still support HMO viability. If the purchase price is sensible relative to achievable room rents, you have more room to:

  • refurbish to a strong standard

  • meet compliance requirements without cutting corners

  • run fully managed with professional oversight

  • maintain yield even when costs rise

In markets where prices have run ahead, investors often feel forced to compromise somewhere. That is rarely a good long-term strategy.

2) Capital appreciation, with an evidence-led mindset

Capital growth is never guaranteed, but it remains a key pillar for many investors. In South Yorkshire, we are seeing capital appreciation at 7%. The practical investor takeaway is not just the percentage, it’s what it does for your longer-term plan:

  • provides potential equity growth alongside income

  • supports refinancing strategies where appropriate

  • improves resilience if market conditions tighten

3) Job access and a broader tenant base

Strong HMOs typically benefit from a diverse tenant pool. South Yorkshire offers that through a mix of:

  • professionals and key workers

  • people relocating for work opportunities and affordability

  • tenants seeking good transport links and amenities

  • non-student renters who want quality shared living

This matters because relying on a single tenant type can increase seasonal voids or expose you to shocks in one sector.

4) Connectivity and commuter logic

A location becomes more investable when it sits naturally within commuting and travel patterns. Good connectivity supports:

  • stable demand from working tenants

  • shorter void periods

  • stronger resilience during employment shifts, because tenants can move jobs without necessarily moving home

5) Amenities that support retention, not just initial demand

Amenities are not just a lifestyle bonus, they influence tenancy length. When tenants can access the things they value, they stay longer, which can reduce:

  • turnover costs

  • marketing costs

  • maintenance strain from frequent move-ins and move-outs

6) Less dependency on student demand

This is one of the most overlooked advantages. South Yorkshire HMOs are not dependent on the student population, which is a fantastic element for investors who want:

  • less seasonality

  • a wider, year-round demand pool

  • reduced exposure to policy or enrolment changes that can affect student-heavy markets

Student HMOs can be profitable, but they come with their own operational rhythms. A professional-led tenant base often supports more consistent year-round occupancy.

“But what about saturation?” Addressing the real concern

Saturation is not just “how many HMOs exist”. It’s whether there are too many similar rooms competing for the same tenants at the same price point.

This is where deep local experience changes outcomes. We’ve spent over two decades operating and developing HMOs in South Yorkshire, which means we can:

  • identify micro-locations where demand stays ahead of supply

  • position properties to stand out on quality, layout, and management

  • price correctly to protect occupancy without racing to the bottom

  • run fully compliant homes that attract and retain the right tenants

The practical point is simple: competition is easier to beat when you understand it locally and operationally.

A hands free approach, and why it matters more than ever

A well-run HMO is a business. It has multiple customers (tenants), higher compliance requirements, and more moving parts than a single-let.

For many investors, the difference between “good on paper” and “actually successful” comes down to whether the property is properly developed, let, and managed day-to-day.

That is exactly why we’ve built our model around supporting investors to develop and then manage completely hands free properties across the North of England, based on 34 years of experience.

If you want to explore opportunities

If you’re considering an HMO purchase and want to focus on locations that are still viable, not just popular online, you can view available opportunities here: HMO for sale

Quick checklist for choosing the right northern HMO location

If you want a simple way to pressure-test an area, use this checklist:

  • Are purchase prices still compatible with strong room rents?

  • Is demand driven by multiple tenant types (not just students)?

  • Are jobs and wages trending positively enough to support rent stability?

  • Are transport links strong enough to widen the tenant pool?

  • Do local amenities support longer tenant stays?

  • Is the area overly saturated with similar HMOs?

  • Do you have a credible plan for compliance and management?

If an area fails several of these tests, it may still be investable, but it needs a much more cautious and specialist approach.