Why HMO Properties Are an Essential Form of Housing, and Why This Is Good News for HMO Investors

August 14, 2026

There is no doubt about it that HMO properties are a form of essential housing in the UK.

The country has a housing problem that has been building for years. Governments talk about building hundreds of thousands of new homes, councils bring forward large housing schemes, developers announce major projects, yet the gap between the number of homes people need and the number actually available remains enormous. Planning drags on, developments stall, costs rise and, in some cases, developers simply go bust before schemes ever reach completion. None of that helps the person who needs somewhere affordable to live now.

We also have to accept a fairly obvious physical limitation. The UK only has a finite amount of land. We cannot create more of it, and the pressure is greatest in the places where people actually want to live, work and build their lives. Towns and cities with good employment, transport links, hospitals, universities and established communities are always going to attract people, yet those same areas cannot endlessly spread outwards with new estates.

Then there is the cost of renting.

For a single person, renting an ordinary house or apartment can now be absurdly expensive. Once rent, council tax, electricity, gas, broadband and everything else have been added together, living alone can swallow an enormous percentage of somebody’s monthly income. Plenty of people simply cannot justify it. Others could technically afford it, but would rather not spend that much money every month just for the privilege of occupying a one-bedroom flat on their own.

This is where a good HMO makes complete sense.

A tenant can have a lovely bedroom, their own ensuite, a well-designed kitchen, decent communal space and a professionally maintained home without having to shoulder the entire cost of a property by themselves. For somebody working full-time, relocating for a job, starting their career or simply wanting to keep their living costs sensible, that can be a far better proposition.

And not everybody wants to live alone anyway.

There seems to be an assumption in parts of the property world that everybody eventually wants their own one-bedroom apartment. That simply is not true. Plenty of tenants like having people around them. They like having their own private space, while still living in a house that feels social. If the property is designed properly, the rooms are a good size, the ensuite is private and the shared areas are pleasant, an HMO can suit somebody extremely well.

More importantly, it can suit their budget even better.

That affordability is one of the reasons HMOs are so important. They make better use of existing housing and can provide several people with good-quality accommodation in locations where building enough new homes is difficult, slow or simply unrealistic.

We have been involved with HMOs for more than 34 years, and there is a reason we have stayed in the sector for that long.

Demand has always been there.

It has changed shape over the years, of course. Tenant expectations are much higher than they used to be, and rightly so. The old model of throwing a few cheap beds into a tired house, doing the bare minimum and calling it an HMO should have disappeared years ago. The modern tenant expects a good room, proper facilities, reliable management and a property they actually enjoy coming home to.

That is exactly how it should be.

We strongly believe that if HMOs are an essential part of the housing market, they should also be a regulated and high-quality part of it. Slum landlords and rogue landlords do enormous damage, not just to tenants, but to the reputation of the entire sector. They should be pushed out.

These are people’s homes. Somebody might live in one of these rooms for several years. They sleep there, cook there, work there, invite friends over and build their daily life around that property. The standard should reflect that.

The Renters’ Rights Act and the wider tightening of standards across the private rented sector will create more work for some landlords. We do not see that as a reason to run away from the market. If regulation forces poor operators to improve or leave, that is a good thing for tenants and, in our view, a good thing for serious landlords too.

We would much rather compete in a market where properties have to be maintained properly, tenants have to be treated properly and landlords have to know what they are doing.

At Foot Forward Property Investments, this is not something we only talk about from the sidelines. We develop and manage HMO properties for investors, but we are HMO investors and landlords ourselves as well. We own these properties. We deal with the same legislation, the same maintenance, the same tenant expectations and the same realities that our investors do.

We also make a point of staying in contact with our tenants.

That matters to us because the best way to understand whether a property is actually working is to speak to the people living in it. You learn what they like, what could be improved, what makes them stay and what makes a house feel like a proper home rather than just somewhere they happen to rent a room.

One conversation has always stayed with us.

A long-term tenant who had spent several years living in one of our HMO properties told us that the money he had saved by choosing to live in an HMO had gone straight into his savings. Over time, that helped him build up the deposit he needed to buy a home of his own.

That is what we do it for.

Yes, HMOs are an investment. They need to stack up financially and they need to be run properly. But when a good HMO gives somebody quality accommodation at a sensible cost, while also giving them enough breathing room financially to save for their own future, that is the kind of outcome we are proud of.

That changes the way you look at an HMO.

It is very easy to make a spreadsheet look attractive. It is much harder to create a property that works properly in the real world. The location needs to make sense. The room sizes need to work. The layout cannot feel cramped or awkward. The bathrooms need to be finished well. The kitchen needs enough space and storage for the number of people using it. Management needs to be responsive, and maintenance cannot be ignored until something becomes a serious problem.

We pride ourselves on developing and managing HMO properties that tenants are genuinely proud to call home. That might sound simple, but it is one of the most important parts of the whole investment.

A tenant who likes where they live is more likely to stay. A property that is looked after properly is easier to manage. A house that has been designed around the tenant, rather than simply squeezing in as many bedrooms as possible, tends to perform better because people actually want to live there.

This is also why a lot of the doom and gloom around HMOs does not bother us too much.

We have heard it for years.

Every time regulations change, somebody announces that HMOs are finished. When licensing becomes stricter, people say landlords will leave the sector. When interest rates rise, the same predictions appear again. Planning rules change and suddenly there is another wave of people insisting the model no longer works.

Yet people still need somewhere to live.

That does not make every HMO a good investment, and it certainly does not mean you can buy any old property, put locks on the bedroom doors and expect it to perform. Location matters enormously. Purchase price matters. Development cost matters. Planning, licensing, room sizes, management and local tenant demand all matter.

But none of those things change the basic reason the sector exists.

The average renter cannot keep absorbing the mental rental prices we are seeing for ordinary houses and apartments. New homes are not being delivered quickly enough to close the gap. Land is finite. Population and household demand continue to put pressure on the housing stock we already have.

A well-run HMO gives several people a good home in a property that might otherwise house one household.

That is a very efficient use of housing.

It is also why we believe the future for high-quality HMOs remains strong. The sector will continue to change. Standards will continue to rise. Poor landlords will find it harder to operate, and that is something we welcome.

After more than 34 years in this market, we are still here because the underlying demand has never gone away. If anything, the affordability problems facing ordinary renters have made the role of good-quality shared housing even more obvious.

For investors who understand the sector properly and are prepared to create the sort of property people genuinely want to live in, that should be good news.

You can see the HMO properties we currently have available at www.footforwardproperties.co.uk/hmo-for-sale.