New research from Excellion Capital, reveals that HMOs sell for as much as 50% above the average house price, and provide rental yields of up to 12.5%.

Excellion’s analysis of HMO sold price data reveals the average HMO licensed property in England sells for £334,260, which is 13.1% above the nation’s general average house price (£295,654).

However, in some of England’s major cities, this HMO premium grows significantly larger.

In Newcastle, where the general average house price currently stands at £211,160, HMOs sell for an average of £315,890. This represents a HMO price premium of 49.6%.

The premium is almost as strong in Nottingham, where an average HMO sale price of £282,942 is 45.5% above the wider average house price.

This is followed by hefty premiums in the likes of Liverpool (39.9%), Birmingham (36.4%), Bristol (30%), Bradford (29.6%), Sheffield (28.1%), London (26.4%), Leicester (23.1%), Manchester (22.7%), Leeds (16.9%), and Brighton (8.8%).

Commenting on the data Excellion Capital vice president of real estate Robert Sadler said: “We have previously spoken about the yield opportunities available from snapping up relatively cheap homes and converting them into HMOs, especially in England’s regional cities, and now this additional research shows that investors who wish to buy a property, carry out the necessary conversion work, and then sell it on can also consider the sector to be one of plentiful returns.”