Landlords with HMOs earn nearly double the amount that standard let landlords do, research reveals.
Aldermore says that HMOs not only challenge outdated perceptions but also deliver cost-effective and life-enriching experiences for students and other tenants.
Its data shows that standard rentals earned £61,846 in gross rental income over the last 12 months.
That figure is just over half the average HMO gross earnings of £120,283.
'Rewarding experience for many students'
The lender's director of mortgages, Jon Cooper, said: "While no housing option is without its trade-offs, our data suggests that HMOs are defying outdated perceptions and offering a more affordable and rewarding experience for many students and presenting a compelling financial opportunity for landlords.
"With the right management and attention to quality, landlords can enjoy reliable returns while offering affordable, socially enriching homes that truly make a difference to student life." He added:
"Whilst it's common knowledge that HMO landlords tend to benefit from enhanced annual incomes and greater yields, the difference in scale here is major.
"The numbers here are a timely reminder of how attractive HMOs can be as an asset class for many landlords across the country."
HMO landlords have profitable portfolios
Aldermore's data also reveals that HMO landlords aren't just earning more in rent, but they also have the most profitable portfolios.
It found that three in 10 (30%) HMO landlords earn between £100,000 and £199,999.
That compares with just one in 10 (10%) landlords without HMOs earning the same amount.
In addition, one in eight (13%) HMO landlords earn more than £200,000, compared to just one in twenty (5%) landlords with standard lets.
Uni students enjoy HMOs
However, HMO landlords don't just earn more, but polling for the lender reveals that HMO tenants, particularly university students, enjoy their homes more.
The survey found that students living in HMOs are paying nearly £200 less than a standard let tenant - £600 vs £791.
And three-quarters of HMO tenants say that living in an HMO has boosted their social life by interacting with others living there.
The best university yields
Student landlords will also be pleased to hear of research from Paragon Bank this week revealing where the best university yields are.
Paragon's analysis of its mortgage offer data from student-dense postcodes over the past two academic years identifies Stoke-on-Trent as the top university town for buy to let yields.
Landlords there are achieving an average yield of 9.42%, down from last year's 9.43%.
Stoke offers landlords an average annual rental income of £14,222 with properties valued at £150,982.
Plymouth ranks second with a 9.27% yield, followed by Liverpool at 8.85%, which dropped from second place last year.
Other notable locations include Southsea (8.31%), Edinburgh (8.23%), Cardiff (8.22%), Coventry (8.16%) and York (8.12%).
The average yield across student postcodes in June 2025 was 7.39%, surpassing the 6.85% yield in non-student areas.
The bank's managing director of mortgages, Louisa Sedgwick, said: "With universities about to commence the new academic year, these figures highlight the enduring strength of the student rental market.”
Student HMO benefits
Simon Thompson, the managing director of Accommodation for Students, said: "While there's no mention of the potential impact of the Renters' Rights Bill on the student HMO market, the data is interesting.
"Aldermore says HMO landlords earn roughly double the gross income of non-HMO landlords, highlighting the potential of an HMO as a high-yield asset."
He added: "In addition to profitability, HMOs are a strategic choice for the student market, as they deliver affordable rents, the lender says they are £200 less per month than other private rentals, which makes them highly attractive to cost-conscious students.
"On top of that, HMOs offer social benefits for tenants which align with student lifestyle preferences, ensuring strong demand and stable returns for landlords."
