Experienced HMO landlords are continuing to invest in their properties, with the largest proportion expecting to spend more than £10,000 on improvements over the next 12 months, Paragon Bank reveals.

The data shows three quarters of landlords have been letting property for at least 10 years, while more than half said long-term investment was one of their main motivations for becoming a provider of HMOs.

Paragon says that commitment is also reflected in landlords’ portfolio plans, with 80% saying they intend to either increase or maintain their overall property portfolio over the next 12 months.

Investment activity remains strong, with 62% of HMO landlords having improved a property within the last six months and a further 24% doing so within the past year.

Looking ahead, 54% said they were extremely likely to carry out further improvements in the next 12 months, while 18% are already in the process of upgrading properties.

When asked how much they expect to spend on improvements over the next year, 28% said more than £10,000, making it the most common response.

A further 15% expect to spend between £5,001 and £10,000.

The work being undertaken spans both presentation and long-term property standards.

While decoration and kitchen or bathroom improvements remain common, landlords are also investing in regulatory or compliance upgrades, safety improvements such as alarms and fire doors, and energy efficiency works.

Data found the commercial case for continued investment remains clear, with 82% of landlords agreeing that HMOs offer better rental yields than other residential letting properties and 79% saying they generate better profitable returns.

This is supported by Paragon lending data, which shows HMOs generated an average yield of 8.90% in Q2 2026, the highest of any property type recorded by the bank.

Paragon Bank managing director of mortgages Louisa Sedgwick says: “These findings show that many HMO home providers are experienced operators who continue to take a long-term view of the sector.”

“HMOs can be more complex to manage than standard buy-to-let properties, but they remain attractive to landlords who understand the market and have the expertise to operate successfully within it.”

“What stands out is that landlords are continuing to invest as standards, costs and regulation evolve. The level of planned expenditure suggests that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well positioned over the long term.”