Why Hull is not a good place for HMO investment
September 30, 2026
Hull comes up an awful lot when investors start researching HMO investment in Yorkshire and the wider North of England. On the surface, it is easy to understand why. Property can still look relatively cheap, there is a long-established HMO market and a quick search online will uncover plenty of agents, deal sourcers and property companies promoting Hull HMO investments on the strength of purchase price and headline gross yield.
We take a very different view.
Foot Forward Property Investments has been developing and managing HMO properties for over 34 years. Across that time, we have completed more than 450 HMO developments, predominantly across South Yorkshire, and we continue to manage the properties we develop for investors rather than simply selling them and walking away.
That gives us considerable experience of how HMO markets across Yorkshire and the Humber actually behave once the refurbishment has finished, the glossy investment brochure has disappeared and somebody has to find tenants, collect rent, manage compliance, maintain the building and keep occupancy strong year after year.
For us, Hull does not fit the type of market in which we want to develop HMO investments.
Hull already has around 2,000 HMO properties
One of the biggest issues is saturation.
Recent reporting on Hull City Council discussions stated that the city has around 2,000 HMO properties, with councillors hearing that HMO concentration has reached approximately 50% of properties on some streets.
Think about that from an investment perspective.
If you are considering putting significant capital into developing an HMO, do you really want to buy into a street where potentially half of the surrounding properties are already competing for broadly the same type of tenant?
We certainly do not.
HMO investment is not simply a calculation of purchase price divided by rent. Supply matters. Tenant profile matters. The quality of the surrounding housing stock matters. The number of competing rooms matters. Local planning policy matters. Long-term demand relative to supply matters.
Hull City Council itself has acknowledged the problems created when HMOs become excessively concentrated. Its planning guidance states that areas with too many HMOs can experience anti-social behaviour, noise and disturbance, waste-management problems and parking pressures. The council has already introduced Article 4 controls across substantial parts of Hull and supplementary planning guidance specifically aimed at preventing further concentrations.
This is not somebody on social media speculating that Hull might be saturated. The local authority has been actively introducing planning controls because HMO concentration has become an established issue.
Some Hull streets are already at the point where further HMOs are restricted
Hull’s planning policy also gives investors another fairly obvious warning sign.
Within relevant Article 4 areas, council policy has used a 50% HMO and flat concentration threshold, above which further HMO development would generally not be permitted, subject to the applicable policy and area. Hull has also introduced guidance designed to prevent family homes becoming “sandwiched” between HMOs and to prevent the creation of three or more adjacent HMO properties.
You do not introduce policies like these in a market suffering from a shortage of HMO development.
They exist because concentration has already become a planning and neighbourhood issue.
For an investor thinking five, ten or fifteen years ahead, that should form part of the investment decision. Buying somewhere because the house costs £80,000, £100,000 or £120,000 is pointless if the wider area is already carrying a very high density of shared accommodation and you are entering a market surrounded by established competitors.
Hull’s biggest attraction has always been obvious: it is cheap
So why does Hull continue appearing on HMO investment lists?
One word. Cheap.
That is the attraction.
Investors see a low purchase price and immediately assume they have discovered a bargain. A property sourcer can then put an attractive refurbishment budget next to it, calculate an optimistic room rent, multiply that by five or six bedrooms and present a very impressive looking gross yield.
It makes for a lovely spreadsheet.
The problem begins when that spreadsheet meets the real rental market.
Cheap property is usually cheap for a reason. An investor needs to understand employment, earnings, deprivation, competing rental stock, tenant demographics, room-rate ceilings, planning restrictions, property condition, management requirements and long-term resale demand before deciding whether a low purchase price represents value.
Hull remains one of England’s more deprived local authorities. According to the 2025 English Indices of Deprivation, Hull was ranked as the sixth most deprived upper-tier local authority in England by average deprivation score. It ranked fourth when measured by the proportion of neighbourhoods falling within the most deprived 10% nationally.
A deprived area does not automatically make every property within it a poor investment. It does, however, make the simplistic “cheap property equals high return” argument particularly dangerous.
HMO investors are buying an income-producing business wrapped inside a residential property. The quality and sustainability of that income matters far more than how cheaply somebody can get the keys.
Poorly managed HMOs have damaged the reputation of parts of Hull
There is another problem which established landlords cannot ignore.
Hull has developed a reputation for concentrations of poorly managed shared accommodation in certain areas, alongside concerns about some parts of the supported housing sector. Local residents and councillors have repeatedly raised concerns over anti-social behaviour, noise, waste, neighbourhood disruption and poor property management associated with concentrated shared accommodation.
Hull City Council has explicitly stated that concentrated HMOs can result in above-average levels of anti-social behaviour, noise and disturbance, along with waste and parking issues.
The council also operates a dedicated supported accommodation review programme which carries out property inspections, reviews resident support and responds to complaints from members of the public. An independent evaluation of supported housing oversight pilots recorded 99 Hull resident complaints concerning support and 224 actions requiring improvements in resident support during the programme covered by the evaluation.
Hull City Council’s own Supported Housing Provider Charter contains resident feedback ranging from positive experiences through to concerns around poor property conditions, lack of security, inadequate support and support workers failing to visit properties regularly.
We would never claim every HMO landlord or supported accommodation provider in Hull operates badly. They clearly do not. There will be responsible landlords with well-maintained properties and good tenants.
The investment issue is the concentration.
When enough poor properties and poor operators accumulate within particular streets, every landlord in that area has to live with the consequences. The reputation of the street changes. Neighbour relationships become more difficult. Planning scrutiny increases. Councillors face pressure to introduce tighter restrictions. Better-quality professional tenants may have more attractive alternatives elsewhere.
That is precisely why we are extremely selective about where we develop.
A high gross yield does not mean you have found a good HMO investment
This is where inexperienced investors can get caught.
Imagine somebody offers you a Hull HMO producing what appears to be a very high gross yield. Before getting excited about that percentage, ask what happens after the bills are paid.
What occupancy has actually been achieved across comparable HMOs nearby? What are tenants genuinely paying rather than what the investment appraisal says they will pay? How frequently are rooms turning over? What maintenance expenditure should you expect? How competitive is the immediate postcode? What condition are neighbouring HMOs in? How much does the management cost? What does the property produce after utilities, council tax, broadband, cleaning, repairs, maintenance, compliance, licensing and void periods?
We have always preferred to talk about NET yield.
A theoretical 13%, 14% or 15% gross yield becomes considerably less exciting when the property has persistent empty rooms, regular tenant turnover, higher management involvement and continuing repair costs.
We have seen plenty of property investments over the years where the headline numbers looked fantastic because the person selling the investment would never be responsible for managing it afterwards.
That brings us to another reason Hull became so popular.
Property sourcers flocked to Hull because cheap houses were easy to package
During various stages of the HMO boom, Hull became an obvious location for property deal sourcers.
Cheap houses are easy to market.
Take an inexpensive terraced property, produce a refurbishment estimate, divide the finished building into several rooms, attach optimistic rents and suddenly you have an investment opportunity carrying an enormous headline percentage return.
The sourcer earns a fee.
The investor owns the property.
Those are two very different positions.
Once the property has completed, it is the investor who discovers whether the projected rents were realistic. It is the investor who owns the asset if the street already has substantial HMO concentration. It is the investor who suffers if occupancy is weak. It is the investor paying when an underestimated refurbishment budget becomes considerably more expensive.
A lot of investors have had their fingers burnt buying property in cheap northern locations because they concentrated almost entirely on acquisition price and advertised gross yield.
We have spent more than three decades doing the opposite.
We only develop HMOs in locations where we are prepared to manage them
Foot Forward is not a national HMO deal packaging business.
We develop HMO investments directly and our management business manages the finished properties. In fact, we only manage HMOs that we develop ourselves.
That completely changes our attitude towards location.
We cannot simply sell an investor a house in Hull, Newcastle, Middlesbrough, Liverpool or another fashionable HMO hotspot and forget about what happens next. If we develop a property, our team has to manage that investment after completion.
We have to find the tenants.
We have to collect the rent.
We have to manage licensing and compliance.
We have to inspect it.
We have to deal with maintenance.
We have to keep rooms occupied.
We have to answer to the investor if something is not working.
Therefore, we have absolutely no interest in developing HMOs in an area simply because houses are cheap.
Our focus remains South Yorkshire
Our professional HMO investment model is centred predominantly around South Yorkshire, where we have built our operating experience over more than 34 years.
Rather than chasing the cheapest housing stock available, we look for properties and locations capable of supporting good-quality professional HMOs over the long term.
Our developments are substantial back-to-brick refurbishments. They are not cheap cosmetic conversions designed to squeeze the maximum number of bedrooms into the smallest possible footprint.
We generally focus on five and six-bedroom professional HMOs with ensuite bedrooms, suitable communal space, gardens or outdoor space and, wherever possible, off-road parking. The properties are designed around the people who will actually live there.
Our tenants include people working throughout the local economy, from logistics and healthcare to councils, policing, manufacturing and other professional employment.
There is also no advantage in creating an unnecessarily expensive boutique HMO that forces the landlord to charge rents beyond the local rental ceiling. The specification needs to be high quality, durable, comfortable and maintainable while allowing the property to remain competitively priced.
That model has been developed from managing real HMOs, rather than producing investment spreadsheets.
Cheap does not mean good value
This is probably the biggest lesson for anybody researching HMO investment in Hull.
Stop judging HMO opportunities primarily by how little the house costs.
A £100,000 property that struggles to retain tenants is not necessarily better value than a £150,000 property in an area with stronger professional demand. A refurbishment that saves £20,000 by cutting corners is not a saving when maintenance problems start appearing two years later. A theoretical 15% gross yield means very little if the actual NET return is nowhere close.
Investors should be asking whether the investment works after every realistic cost has been included and whether the location can support the property for the next ten or twenty years.
Hull’s combination of approximately 2,000 HMOs, very high concentrations on certain streets, established Article 4 controls, further policies designed to prevent HMO clustering and documented neighbourhood concerns makes it an area we personally choose to avoid for our HMO developments.
That does not mean nobody can make money from an HMO in Hull. Some landlords undoubtedly do.
It means we believe there are better places to deploy investor capital.
After more than 450 HMO developments, we would rather buy in an area where we have confidence in sustainable professional tenant demand, sensible levels of competition and the long-term management of the property than chase an artificially impressive gross yield simply because the starting property happens to be cheap.
If you are looking for fully managed HMO investments in the UK, Foot Forward Property Investments develops professional five and six-bedroom HMOs in carefully selected areas of South Yorkshire. Our in-house team handles the process from property acquisition and substantial back-to-brick refurbishment through to licensing, compliance, tenant finding, ongoing management and maintenance.
We lead with realistic NET yields, not an inflated gross figure designed to make an investment look better than it really is.
View our current HMO investment properties and learn more about our development model at: