Why Southern Investors Are Turning North for HMOs
March 25, 2026
For years, London dominated the conversation around UK property investment. That is starting to change.
More investors from the South are now looking north for stronger value, better rental performance, and more practical opportunities to build long-term HMO portfolios. Recent reporting from City A.M. underlines why. London house prices have slipped again, average values remain extremely high, buyer affordability is stretched, and the balance of supply and demand has shifted in a way that is putting pressure on pricing. City A.M. reported that London house prices were down 0.3% year on year, with the average property price at £566,000, while buyers had gained “time and choice” in a softer market.
That matters to HMO investors.
When acquisition costs stay high, capital growth slows, and regulation keeps tightening, more investors start asking a simple question. Is there a better way to build a profitable, fully managed portfolio without relying on London?
For a growing number of investors, the answer is yes.
London is not just struggling on price
The challenge in London is not only that property prices remain expensive. It is that the wider investment picture has become harder to justify.
City A.M. highlighted weakening price momentum, poor affordability, and a market that is being “reshaped” by a glut of homes for sale. The same report also noted that landlords are leaving the sector because of regulatory concerns and low yields, alongside a 41% reduction in the number of London properties available for private rent since the pandemic ended.
For HMO investors, that combination creates pressure from several directions at once:
- very high entry prices
- softer capital growth prospects
- tighter margins
- increasing regulatory complexity
- stronger competition in established HMO areas
That is why more investors from down south are broadening their search.
They are no longer looking only at what is familiar. They are looking at what works.
Why northern HMO property investments are attracting serious attention
Northern HMO property investments appeal to southern investors for one clear reason. The numbers often make more sense.
In the North, investors can still buy larger stock, at far lower entry prices, in markets where professional tenant demand remains strong. This gives landlords more room to create a compliant, well-managed HMO and still protect yield.
That shift is not just theoretical. We happily deal with London investors every week who are looking to build trusted, fully managed portfolios through our in-house portfolio building service. They want a reliable route into stronger HMO markets without having to manage every moving part themselves.
In many cases, they first look at cities like Manchester, Liverpool, and Newcastle. Those locations have become well known in investor circles. The problem is that popularity often attracts waves of investors into the same postcodes. In our own published market commentary, we have highlighted how investor inflows into Manchester, Liverpool, and parts of Newcastle have created oversaturation in specific areas, increasing competition and putting pressure on yields.
This is where market selection becomes critical.
The best HMO investment areas are not always the loudest ones.
Why Doncaster stands out for HMO investment
Doncaster continues to attract more attention from investors who want value, rental demand, and room for growth.
The latest ONS local housing data shows that the average house price in Doncaster was £175,000 in January 2026, while average monthly private rent reached £681 in February 2026. House prices were up 6.9% year on year, and rents were up 5.8%, both ahead of the Yorkshire and the Humber regional rate.
That combination matters because it gives investors two things at once:
- accessible entry pricing
- evidence of ongoing capital and rental growth
Employment also supports the area. ONS labour market data shows Doncaster’s employment rate at 74.5% in the year ending December 2023, slightly above the Yorkshire and the Humber average.
Transport links add another layer of strength. Doncaster sits in a highly connected position for commuting across South Yorkshire and beyond. Fast rail services to Sheffield can take around 22 minutes on the quickest journeys, making it practical for many professional tenants to live in Doncaster and work elsewhere in the region.
For HMO investors, that is exactly the sort of demand profile that supports sustainable occupancy.
Why Wakefield remains a strong northern HMO market
Wakefield offers another compelling option for investors moving their focus north.
According to the ONS, the average house price in Wakefield was £199,000 in January 2026, while average monthly private rent reached £785 in February 2026. House prices rose 4.0% year on year, and rents rose 4.8%, again outperforming the Yorkshire and the Humber regional benchmark.
Wakefield also benefits from a solid employment base. ONS data shows a 73.9% employment rate in the year ending December 2023.
Its connectivity is a major strength. National Rail journey data shows Wakefield Westgate to Leeds in as little as 14 minutes on a direct journey, helping support demand from professionals who want quick access to major employment centres without paying Leeds prices.
This is exactly the sort of market that appeals to investors who want better balance, lower entry costs than southern locations, strong commuter demand, and practical long-term HMO potential.
Why Rotherham deserves more investor attention
Rotherham is another location that often gets overlooked too easily.
ONS data shows the average house price in Rotherham at £189,000 in January 2026, with average private rent at £678 in February 2026. House prices rose 3.5% year on year, and rents rose 5.5%, both above the wider regional rate.
Rotherham’s transport position also helps. The town sits close to Sheffield and benefits from short rail journeys between the two, giving working tenants an affordable base with quick access to jobs and services across the area. National Rail’s route information confirms regular direct travel from Rotherham Central to Sheffield.
Although Rotherham’s employment rate came in lower than the regional average at 67.1% in the year ending December 2023, it still forms part of a wider South Yorkshire economy where affordability and connectivity support rental demand.
For many HMO investors, that makes Rotherham a market worth serious consideration, especially when compared with southern locations where purchase prices are much harder to justify.
Why many southern investors now skip the obvious northern cities
A lot of investors from London and the South initially focus on Manchester, Liverpool, or Newcastle. That is understandable. These cities are well known, heavily marketed, and frequently promoted as property hotspots.
Yet well-publicised markets often become crowded markets.
When too many investors chase the same strategy in the same areas, yields can suffer. Competition for tenants rises. Stock becomes more expensive. Management becomes more demanding. In some postcodes, oversupply starts to chip away at the very returns that attracted investors in the first place. That is exactly why disciplined investors increasingly look beyond the usual shortlist and focus on markets where the fundamentals still stack up.
Doncaster, Wakefield, and Rotherham fit that profile far better than many of the overhyped city-centre plays investors hear about first.
Why experience matters more than ever
Buying an HMO is one thing. Building a reliable, fully managed portfolio is another.
That is why investors need more than a sourcing company or a sales pitch. They need local knowledge, management experience, and a team that understands what actually drives performance in a real HMO market.
We bring over 34 years of experience in developing and managing HMO properties. We work with investors who want a trusted route into the market, especially those based in London and the South who want fully managed portfolios without taking unnecessary risks. Through our in-house portfolio building service, we help investors focus on locations where the fundamentals remain strong and where the long-term case still makes commercial sense.
That is exactly why so many southern investors now trust us to help them build in the North.
Why the North now makes more sense for many HMO investors
The direction of travel is becoming clearer.
London still has scale and prestige, but many investors are no longer chasing prestige. They are chasing performance, resilience, and value. With southern markets facing softer pricing, affordability issues, tighter margins, and more operational pressure, northern HMO property investments have become a far more practical alternative.
For investors who want strong rental demand, better-value stock, solid transport links, and room for capital appreciation, Doncaster, Wakefield, and Rotherham deserve a place at the top of the list.
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