Experienced HMO landlords are continuing to invest in their properties, with 28% expecting to spend more than £10,000 on improvements in the next year, Paragon Bank has revealed.

The bank’s latest research found that many HMO landlords are established operators with a long-term commitment to the private rented sector. Three quarters have been letting property for at least 10 years, while more than half said long-term investment was one of the main motivations for becoming a provider for HMOs.

Four in five (80%) intend to either increase or maintain their overall property portfolio over the next 12 months, with investment activity remaining strong, with 62% of HMO landlords improving a property within the last six months. A further 24% have done so in the past year.

Looking ahead, 54% stated they were extremely likely to carry out further improvements in the next 12 months, while 18% are already in the process of upgrading properties.

When asked how much they expect to spend over the next year, 28% of HMO landlords said ore than £10,000, while 15% expect to spend between £5,001 and £10,000.

The data comes as home providers continue to navigate a more demanding operating environment, with higher running costs, regulatory change, licensing requirements and a higher rate environment all adding complexity to HMO ownership and management.

Managing director of mortgages at Paragon Bank, Louisa Segdwick, stated: “These findings show that many HMO home providers are experienced operators who continue to take a long-term view of the sector. HMOs can be more complex to manage than standard buy-to-let properties, but they remain attractive to landlords who understand the market and have the expertise to operate successfully within it.

“What stands out is that landlords are continuing to invest as standards, costs and regulation evolve. The level of planned expenditure suggests that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well positioned over the long term.

“For brokers, this creates opportunities to support landlords who are reviewing their portfolios, funding improvement works or looking to structure borrowing around more specialist property types. Understanding the reasons behind that investment, whether linked to asset quality, regulatory requirements or long-term returns, is increasingly important when advising clients in the HMO market.”

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