Octane Capital, a property finance provider, stated that "London has been the hardest area to find ready-made HMOs to date. While there might be a significant stock of properties in London, HMO landlords appear to be holding onto their assets for the long term and are showing little willingness to sell. Therefore, it may be better to buy residential or commercial properties in London and convert them into HMOs, although there are challenges in obtaining permissions."

Investors looking to purchase an HMO would find the most opportunities in the southeast, where there are 654 listed properties, accounting for 19.4% of all listed HMOs. The northwest also has a significant number of HMOs, with 507 in the market, constituting 15.1% of the national HMO stock. The East Midlands ranks third, with 448 HMOs currently on the market.

For investors seeking higher returns, properties divided into different units are an ideal choice. Previous research by Octane Capital found that an HMO with four tenants typically generates rents of £593 per room or £2,372 per month for the investor, with an average yield of 8.1%, surpassing the 4.4% for a standard four-bedroom property.

However, even outside London, finding a house that is already operating as an HMO listed for sale is a challenge. In fact, out of 217,000 HMOs across England, only 1.6% are currently listed for sale. This makes converting residential properties into HMOs to meet market demand a highly attractive opportunity.

HMO (House in Multiple Occupation) refers to the conversion of regular houses into residences for multiple occupants. These houses are often divided into several units, each providing basic living facilities such as kitchens, bathrooms, and toilets. HMOs are typically rented to singles, students, or low-income families due to their relatively affordable living arrangement, allowing for shared amenities and services.

However, operating an HMO requires compliance with various regulations and requirements. In England and Wales, if a house is divided into three or more independent living units sharing basic facilities, an HMO license must be obtained. This license is issued by the local council and stipulates standards and conditions that must be adhered to in its operation.

To obtain an HMO license, landlords need to demonstrate their ability to meet a range of requirements, including the installation of safety equipment (such as fire alarms), the structure of the property, hygiene, and evacuation arrangements. If the landlord's property does not meet the standards, modifications may be required to comply with the local council's requirements. Additionally, the operation of an HMO property must comply with other legal regulations, such as signing contracts with tenants and ensuring deposit security.