Landlords are increasingly tailoring houses in multiple occupation (HMO) portfolios to appeal to clearly defined tenant groups, Paragon Bank has revealed.

The bank’s latest research found that 92% of landlords actively prepare or present their HMOs to attract a particular tenant type, with students the most commonly targeted group (36%), followed by white collar or professional workers (25%) and young single tenants (19%).

Paragon Bank stated that this targeted approach is influencing both how landlords upgrade existing properties and the types of HMOs they look to acquire.

Twenty-five percent of landlords now prioritise ensuite bedrooms when identifying investment opportunities, while 19% favour locations close to work hubs or transport links. Larger bedroom sizes (19%) and improved energy efficiency (23%) also feature prominently.

The bank said investment activity reflects this positioning, with 62% of landlords having improved a HMO within the last six months, and a further 24% in the past year.

Alongside tailoring properties to specific tenant groups, landlords are also investing to enhance overall standards, with 58% undertaking upgrades beyond minimum requirements, while half are carrying out regulatory or compliance-focused improvements.

Managing director of mortgages at Paragon Bank, Louisa Sedgwick, said: "These findings show how the HMO market is continuing to evolve, with landlords taking a more targeted and strategic approach to their investments. Many are now clearly identifying the tenant groups they want to attract and shaping their properties accordingly, which is influencing decisions around layout, location and the amenities being offered.

"For brokers, this highlights how varied HMO propositions can be, with borrowing requirements increasingly shaped by property specification, refurbishment plans and the rental positioning landlords are aiming to achieve.

"This creates opportunities to engage with clients at both the acquisition and refinancing stages, particularly where landlords are repositioning properties or building portfolios focused on defined tenant segments. Lenders with experience in more complex propositions, including HMOs, are well placed to support these requirements."

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