Houses in Multiple Occupation (or HMOs for short) are becoming a popular choice for affordable, community-focused housing. Sometimes called “co-living”, HMOs offer tenants a unique blend of affordability, convenience and social interaction, making them ideal for people looking to save money and form connections in today’s challenging housing market.
But are HMOs the future of affordable housing? In this article, we’ll explore how this unique way of living can benefit tenants, communities and local authorities alike, and propose ways to help more people live comfortably through HMOs. Let’s get started!
The benefits of HMOs
While they aren’t always the conventional choice for housing, HMOs could be key to addressing the affordable housing shortage. From simplified budgeting and quick tenant placement to supported living opportunities, shared accommodation can benefit everyone involved.
Affordability and convenience
First and foremost, HMOs offer a financial advantage for tenants by combining both rent and utility bills into a single, fixed payment. This simplifies budgeting, as tenants don’t have to worry about paying separately for electricity, water and internet. Since living spaces in HMOs are also shared, household expenses are divided and typically cost less than single-occupancy dwellings. This shared cost structure makes co-living a more affordable option for individuals on a budget.
Considering the current economic challenges facing the UK, including rising inflation and a cost-of-living crisis, the affordability of HMOs is even more valuable. For those facing financial hardship, these combined payments offer predictability and relief from unexpected rising utility costs. It makes HMOs a smart, affordable choice for tenants looking to manage their expenses while still enjoying a comfortable and convenient home environment.
Combating loneliness and isolation
The COVID-19 pandemic taught us just how important social interactions can be; isolation can significantly impact mental health. HMOs address this essential human need by fostering a co-living environment where shared spaces promote natural interactions and create a sense of community among tenants.
From young professionals living in a new city to vulnerable individuals seeking stability, the communal benefits of co-living can extend to a broad range of people. In a well-managed HMO, a carefully selected mix of tenants helps build a supportive, cohesive community. For many, this setup offers a valuable balance: the privacy of individual rooms with the social benefit of shared living spaces.
Addressing economic challenges
As the cost of living crisis continues and inflation keeps rising, affordable housing solutions such as HMOs are becoming increasingly essential. HMOs provide a practical, budget-friendly solution for individuals with limited income, or those saving for a first home deposit.
HMOs can help to tackle the affordable housing shortage by optimising space to accommodate multiple residents within a single property. This setup not only reduces the overall cost per tenant, but also allows housing providers to serve more individuals without needing additional properties. For local authorities and social housing providers, HMOs are a scalable solution, enabling them to address high demand and budget constraints simultaneously in the UK’s challenging economic landscape.
Fostering independent living
For those who are transitioning from supported living environments – such as leaving home for the first time or coming out of prison – HMOs can play a crucial transitional role. By providing a stable, semi-supported housing option, they act as a stepping stone for people adjusting to independent living.
They can also help address homelessness directly. From young people in “hidden homelessness” (sometimes called couch surfers) to anyone who has lived on the streets or in hostels, HMOs offer a safe, affordable solution. The flexible setup bridges the gap and helps vulnerable individuals gain independence in a community-focused environment, while easing the burden on social services and creating sustainable pathways towards self-sufficiency.
What about supported living solutions?
Some tenants aren’t ready to live completely independently and HMOs can be the ideal solution for supported living setups. Carers and support workers can schedule visits with multiple individuals in one property, which not only optimises their time but also helps reduce travel and resource costs.
For social housing providers, this centralised setup is invaluable, creating an efficient and focused way to address multiple tenants’ needs in one place. By housing tenants with similar support requirements under one roof, HMOs make it easier to provide consistent, accessible care that works well for providers and residents.
Flexible and fast tenant placement
Another benefit of HMOs is that they allow for quicker turnover and placement than family homes and single lets. Quicker turnover in HMOs is in part due to the fact that each room is rented separately; when one tenant leaves, the remaining tenants can stay on at the property. This can be particularly beneficial for local authorities in need of fast, adaptable housing solutions; and landlords who want to maximise their property value and achieve consistent rental income. High demand for affordable housing options also contributes to quicker turnover in HMOs; finding replacement tenants is comparatively easy.
Managing an HMO can be challenging without expert agents on your side. Choose a trusted HMO management provider like Purseglove to be sure that everything is done by the book, from applications and references to compliance processes. Our HMO management service is ideal for landlords and authorities in need of dependable housing solutions that don’t sacrifice on quality.
Are there any legal challenges?
Laws and regulations regarding HMOs generally align with those for standard rental properties, using assured shorthold tenancies (ASTs) and soon-to-be-reformed assured tenancies. However, this can complicate social housing schemes, especially when integrating tenants from supported living backgrounds.
Some local authorities use licence agreements to add flexibility, but these agreements carry risks if misused by unethical landlords or agents. Additionally, many mortgage lenders restrict the use of licence agreements, only supporting them within specific schemes – creating added complexity for would-be HMO providers.
Collaborating for success
At Purseglove Property, we’re collaborating closely with Nottinghamshire’s local authorities to develop innovative housing strategies that bridge the gap between public and private sectors. We’re committed to ethical practices and focused on sustainable solutions that address social housing challenges to enhance the credibility of the HMO model as a viable option.
The key to HMO success: Effective tenant management
The success of a HMO depends on thoughtful tenant management and careful tenant selection. With over a decade of experience, we’ve built harmonious, sustainable living environments here at Purseglove by carefully balancing tenants from diverse backgrounds.
The key is for agents and landlords to truly recognise and respect cultural, economic and lifestyle differences to promote positive interactions and long-term tenancy stability – which in turn fosters a supportive, well-managed community within each property.
Partner with Nottinghamshire’s trusted choice for expertly managed HMOs…
For HMOs to work well, ethical and effective management is essential. With the right practices in place – and an agent who knows their stuff – HMOs can create positive, sustainable outcomes for everyone involved.
Get in touch with Purseglove today to see how we can help bring your HMO property to the next level.