Average annual rental income from houses in multiple occupation rose by £5,000 in 2025 to reach £33,400, according to Lendlord’s Q4 HMO Data Analysis Report. The data, based on 1,158 HMO properties, shows that while rents continue to climb, national yields have slipped below 10 percent for the first time.
North East tops yield rankings
The North East recorded the highest average yield at 15.1 percent, slightly lower than a year earlier but still comfortably ahead of other regions. The area remains one of the smallest HMO markets by volume with just a 3.6 percent share, yet its combination of low property values and solid rents continues to attract investors seeking income-led returns.
The North West accounts for the largest share of the UK’s HMOs at 17.9 percent, followed by Greater London at 16.5 percent. This regional spread reflects the different strategies landlords use: northern markets offer stronger yields while London properties deliver higher absolute rental income, averaging £55,017 per property annually despite tighter percentage returns.
Regional value gap widens
Property values continue to diverge sharply between regions. Average HMO values in Greater London stood at £684,724, up £24,497 year on year, compared with just £232,461 in the North East. This gap of more than £450,000 explains why yields in northern regions consistently outperform the capital.
Nationally, the average HMO yield fell to 9.6 percent from 10.4 percent a year earlier as rising property prices outpaced rental growth. For landlords assessing where to deploy capital for the best returns, the data confirms that income-focused investors should look beyond the South East.
HMOs remain key income driver
Aviram Shahar, co-founder and CEO of Lendlord, said the importance of HMOs to property investors has never been clearer. “Our Q4 2025 figures highlight that yields have remained fairly constant year on year with the average annual rent increasing by an impressive £5,000 in just one year,” he said.
Shahar added that while performance varies significantly across the country, HMOs continue to offer stronger cash flow than standard single-let properties. For landlords operating in areas with Article 4 restrictions or mandatory HMO licensing requirements, the additional compliance burden is often offset by higher rental income per property.
Editor’s view
A £5,000 annual rent increase is eye-catching, but the real story here is regional divergence. The North East continues to punch above its weight on yields while London generates headline income figures. For landlords, the choice increasingly comes down to whether you want percentage returns or absolute pounds in your pocket – and increasingly, the North has the better answer.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 16 February 2026
Sources: Lendlord Q4 2025 HMO Data Analysis Report
Related reading: Landlord yields slip to 6.4% as one in seven report losses
