Landlords are increasingly tailoring houses in multiple occupation (HMOs) to appeal to clearly-defined tenant groups, new research from Paragon Bank has found.
The findings show that 92% of landlords say they have adapted or presented their HMOs to attract a particular tenant type.
Students are the most commonly-targeted group (36%), followed by white-collar or professional workers (25%) and young single tenants (19%).
This approach is influencing both how landlords upgrade existing properties and the types of HMOs they look to acquire.
A quarter of landlords now prioritise ensuite bedrooms when identifying investment opportunities, while 19% favour locations close to work hubs or transport links.
Larger bedroom sizes (19%) and improved energy efficiency (23%) also feature prominently.
Investment activity reflects this positioning, with 62% of landlords having improved an HMO within the last six months and a further 24% in the past year.
Tenant expectations are driving the changes, with 40% seeking faster broadband, 39% looking for ensuite bathrooms and 33% on the hunt for rentals where bills are included.
Landlords are also investing to enhance overall standards, the research suggests, with 58% undertaking upgrades beyond minimum legal requirements and half carrying out regulatory or compliance-focused improvements.
Paragon Bank managing director of mortgages Louisa Sedgwick says: “These findings show how the HMO market is continuing to evolve, with landlords taking a more targeted and strategic approach to their investments.
“Many are now clearly identifying the tenant groups they want to attract and shaping their properties accordingly, which is influencing decisions around layout, location and the amenities being offered.
“For brokers, this highlights how varied HMO propositions can be, with borrowing requirements increasingly shaped by property specification, refurbishment plans and the rental positioning landlords are aiming to achieve.
“This creates opportunities to engage with clients at both the acquisition and refinancing stages, particularly where landlords are repositioning properties or building portfolios focused on defined tenant segments.
“Lenders with experience in more complex propositions, including HMOs, are well placed to support these requirements.”
