How Covid-19 has affected the HMO market
What has lockdown meant for most HMO landlords across the UK? Will HMOs be a thing of
As an HMO landlord myself I can’t deny that lockdown has affected my business, but I do
see a light at the end of the tunnel and have continued to grow my portfolio through the
Challenges faced through lockdown:
Non-payment of Rent
Initially this was a huge concern for all landlords as there was the fear of people losing their
jobs or employees being furloughed. However, UK’s economy had a huge amount of support
from the government through the Coronavirus Job Retention Scheme where workers were
paid 80% of their salary for hours not worked. This scheme helped put money back into
tenant’s pockets and as a result majority of landlords weren’t affected by tenants not paying
This is one of the more pressing issues UK HMO landlords are facing at the moment. A void
HMO can quickly turn your asset into a liability where you are forced to continue to pay
monthly overhead costs that buy-to-let landlords wouldn’t have to worry about.
Why has demand faded?
HMO accommodation is quick and convenient to move into but is usually used by its tenants
as a temporary bridge for future plans. Students may rent HMOs for the social aspect, but as
soon as studies have completed, they will move on with their lives. Young professionals may
move into HMO’s temporarily whilst they find their dream home or settle into a new job at a
new location. Seasonal workers will rent out HMOs whilst they have work.
My point being is that HMO accommodation always will be temporary for most people,
tenants don’t intend to live in HMO’s all their lives. Generally, HMO tenancies range from 3
to 12 months long.
What has lockdown done? Its kept everyone in one place. There’s no moving around, which
has temporarily killed demand. Students haven’t physically been going to university,
overseas seasonal workers can’t get into the country, young professionals aren’t expected to
go into work every day and can work from afar.
What can we do in the meantime?
Treat your current tenants like royalty so they don’t want to leave.
Not as though we shouldn’t be doing this in the first instance, but I know some
landlords who aren’t so responsive to their tenants needs or who procrastinate
repairs. If you are a landlord who does this, id cut it out of your habitual
routine and start treating your tenants like royalty. Ask them if they are okay
and if there is anything they need in the house; maybe get someone to clean
the house once a while. It all pays off in the long run.
Rent your HMO as a single let
If you are really struggling to fill your rooms and have monthly bills to your
ears, I would look into the possibility of temporarily renting your HMO as a
single let on an Assured Shorthold Tenancy (AST). You won’t receive the
massive monthly income you are normally used to but at least it won’t be
costing you any money.
What does the future hold for HMO’s?
As I previously mentioned, I have been growing my HMO portfolio through the pandemic.
Why would I do that? Because, I am well confident that once the economy starts moving
again, which I believe is just around the corner, demand for HMO’s will rise again. However,
this is just my opinion but I can tell you it’s of the same as a lot of HMO property managers
and HMO landlords out there.