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Student HMOs: A smart opportunity for landlords and a smarter conversation for brokers

Mortgages 5 min read 23/09/2025

As demand for student accommodation remains high and affordability continues to shape tenant decisions, Houses in Multiple Occupation (HMOs) are proving to be a standout option, not just for students, but for landlords and brokers too.

At Aldermore, we’ve recently enhanced our HMO mortgage proposition, and our latest research highlights why it’s an opportunity worth your attention.

HMOs offer real value for students

According to our findings*, students living in HMOs are saving nearly £200 per month compared to those in other types of private rental housing. The average HMO tenant pays £600 per month, while students in non-HMO rentals pay around £791.

This significant cost difference is a key factor driving demand and a clear indicator of why HMOs continue to appeal in a challenging housing market.

Students in HMOs save, on average, £2,292 per year compared to other private rentals.

 

Social benefits drive long-term appeal 

Colourful terrace houses

It’s not just about the money. HMOs are also creating better living experiences:

  • 74% of students said their HMO helped them socialise more.
  • 72% prefer living in an HMO over halls.
  • 80% would recommend HMO living to others.

This kind of sentiment helps keep occupancy rates high and void periods low, two things every landlord wants to hear.

 

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Better experiences with better landlords

HMOs also scored well in terms of property management:

  • 65% of HMO tenants said their landlord was easy to contact, higher than the 55% of those in other private rentals.
  • 30% reported property improvements (e.g., furniture/appliance upgrades) during their tenancy, compared to only 19% elsewhere.

This suggests that professionally managed HMOs aren’t just meeting expectations, they’re exceeding them.

For brokers, this means there’s a strong case to support landlords expanding into the HMO space with the right financing in place.

Aldermore: Your HMO lending partner 

Jon Cooper, Director of Mortgages at Aldermore said: “HMOs are defying outdated perceptions and offering a more affordable and rewarding experience for students. With the right management, landlords can enjoy reliable returns while offering affordable, socially enriching homes.

“Not all lenders will offer a mortgage for HMOs, and criteria can differ widely. It makes sense for brokers to build their knowledge of this important sector. We’re here to help you do that, and to help your clients grow with confidence.”

At Aldermore, we’ve supercharged our HMO proposition to deliver:

  • Free valuations on single HMO properties with up to 6 beds, saving your clients money from the outset.
  • A specialist HMO case‑management service with personalised support from dedicated experts, guiding applications from submission to completion.
  • More flexible conveyancing options; choose between managed or open-panel conveyancing. Assisted legal fees on remortgages are also available.
  • Lowered Interest Coverage Ratio (ICR) increasing affordability and unlocking greater borrowing power.
  • A broker-first mindset; we prioritise speed, clarity, and results, with case-by-case underwriting that applies common-sense decisions.

 

Why brokers choose Aldermore for HMO deals

  • Specialist experience:

We understand the nuances of HMO lending, including student lets and multi-unit properties.

  • Flexible criteria:

We assess cases on their merits, not just by box-ticking.

  • Custom finance solutions:

From experienced landlords to first-time HMO investors, we can create bespoke mortgage deals to suit a range of needs.

  • Ongoing improvements:

We’re continuously refining our criteria, processes, and technology to improve outcomes for brokers and clients alike.

Lady in the office, beetween two other ladies

Let’s grow together

As a broker, staying informed on what tenants value, and how the market is shifting, puts you in a stronger position to support your landlord clients. With Aldermore as your partner, you can offer more than a mortgage. You can offer insight, flexibility, and real added value.

Explore our latest HMO products or speak to your BDM today to see how we can help.

*Research conducted on behalf of Aldermore bank by Opinium Research between 4th – 14th July 2025 among 1,000 UK university students.