Professional tenants living in Houses in Multiple Occupation are able to save over £1,600 more a year that those renting alone

Landlord Expert
By Landlord Expert June 4, 2015 12:40
  • Professional sharers in HMOs save 77% more a month than those who rent alone (£308 a month compared to £174)
  • HMO tenants spend an average of £556 a month on rent (including bills) versus an average cost of £975 for a one bedroom flat
  • HMO tenants value flexibility and social benefits of house shares as well as affordability

Professional tenants are able to save £134 more a month by sharing in a House in Multiple Occupation (HMO) rather than renting a one bedroom flat alone, according to new research from Platinum Property Partners (PPP), the specialist buy-to-let business.

A survey of HMO tenants by and PPP shows that professional sharers can afford to put away an average of £308 per month by living in a flat or house share. In contrast, the average renter saves just £174 per month: £1,608 less over the course of a year.

The majority (89%) of HMO tenants surveyed said they would like to own their own home in the future and nearly one in ten (7%) believe they could afford to buy now. A further 29% could afford the mortgage payments but not the deposit or stamp duty.

If HMO tenants were to put these monthly savings towards buying a property, it would take them 5.6 years to save for the average first-time buyer deposit of £20,600. For private renters not living in an HMO, this would take 9.9 years – almost double the time

Tenants who live in shared housing are able to save more partly because they pay much lower rental costs. According to the survey, the average monthly cost of a room in an HMO (including bills) is £556. In comparison, the average monthly rent for a one bedroom flat is £7304: 31% higher and £2,088 more expensive on an annual basis, even before the cost of bills is considered.

Average monthly household bills for a one bedroom flat (including council tax, gas, electricity, water, broadband and TV) are £2455, bringing the total costs for average renters up to £975 per month: £5,028 more than renting in an HMO.

Table One: Monthly cost of renting in an HMO (including bills) versus a one bedroom flat


Room in an HMO (including bills)

One bedroom flat

£ difference

% difference

Average monthly rent





Average monthly household bills*





Total monthly cost





*includes council tax, gas, electricity, water, broadband and TV

Affordability is main reason for living in a professional house share

When asked why they share as opposed to renting alone, over half (53%) of respondents cited affordability and 18% said it was the ability to save.

The average monthly pay of a professional renting in an HMO is £24,460: this amounts to £1,643 in monthly take-home pay. Professional sharers therefore spend a third (34%) of their take-home pay on rental costs (also including bills).

Assuming a similar average salary, tenants in a one bedroom flat spend 44% of their take-home pay on renting alone, and this rises to over half (59%) when bills are taken into account.

Two in five (42%) HMO tenants say they would save less if they were renting on their own and 21% wouldn’t be able to save anything at all. 

Having all bills included means that HMO tenants feel they are better able to manage their budgets – a third of tenants surveyed agreed with this (33%).

Yet HMO tenants also enjoy social aspect and greater flexibility

However, financial benefits aren’t the only advantage of living in an HMO. 17% of professional HMO tenants agree that they share as opposed to renting alone because it’s more social and gives them the opportunity to meet new people.  

In addition, separate PPP research revealed that living in an HMO is also a more flexible option for the UK’s increasingly mobile workforce. 14% of PPP tenants say that they share rather than rent alone because they haven’t decided where they want to settle yet, while almost one in ten (8%) need to be able to move around for work. 

Steve Bolton, Founder and Chairman of Platinum Property Partners (PPP) comments:  

“The cost of renting has been rising steadily in the past few years as consumer demand for rental property grows. Social trends are partly behind this – people are choosing to settle later in life, and the UK’s workforce is increasingly mobile. Rising house prices have also resulted in some choosing to stay in the private rental sector longer.  

“At some stage, renting is a fact of life for most people. However, excessive rental costs can prevent tenants from realising their long-term goals, leaving them trapped in a vicious spiral of sky high rents and not being able to save for the future. Our research shows that living in an HMO is far more affordable than renting alone – and means HMO tenants have a realistic timeframe for saving up for future goals like a house deposit.

“HMOs aren’t just more affordable – they also offer high quality, flexible living. Living alone isn’t for everybody, and many HMO tenants enjoy the social aspect of living with a group of new people. For those who don’t want to commit to one location just yet, HMOs are also an enjoyable and affordable way of testing the waters in a new area. They also remove the cost and hassle of moving from one unfurnished property to another – which can prove invaluable when moving frequently for work.” 

For more information about Platinum Property Partners please visit

Top Tips from Platinum Property Partners on Buy-To-Let Investment

  • Set financial goals – Determine what you hope to gain from your BTL portfolio. This could be capital growth, long-term income to supplement retirement income or to provide a substitute income now.
  • What asset classes are you comparing your BTL investment to?  – Determine whether you need to compare the performance of a BTL property to an existing portfolio, or alternative asset investment classes.
  • Measure BTL investment consistently and effectively – This enables you to assess whether you are on track to achieve your financial goals, and determine how best to maximise your income. Effective measurement will also help you manage risk and opportunities to expand your portfolio, as well as understand potential tax liabilities and allowances.
  • Assess the performance of your BTL portfolio by Return on Investment or Return on Equity - These measures take into account both income and capital growth, and the actual sum invested. These should be used by any landlord and especially those who want to live off the proceeds of their BTL investment or top up their current level of income.
  • Seek advice on investment measurement – If you are unclear about the meaning of key financial terms and not confident about how to calculate your returns, you should immediately seek out expert advice and do more through due diligence.  


  • The results are based on the combined responses of over 470 HMO tenants surveyed by and 168 HMO tenants surveyed by Platinum Property Partners in Q1 2015.  All figures are combined averages unless otherwise stated. All HMO tenants surveyed pay rent with bills included.
  • The HMO tenants surveyed do not include students or those who own a property elsewhere but are living away from home for work.
  • Scottish Widows Savings and Investment Report 2014: private renters save £2,090 a year (£174 monthly) – see here
  • Based on a 10% deposit on the average first-time buyer house price (£206,000 according to the ONS House Price Index – see here)
  • Average one bedroom rent from the Countrywide Quarterly Lettings Index – Q1 2015
  • Household bills based on average gas, electricity and water costs for single person / one – two bedroom flat, from Under One Roof (see here). TV and broadband bundle from Virgin Media (average monthly cost for first two years taking into account end of introductory offer and monthly line rental – see here). Average council tax costs from Department for Communities and Local Government, 2014-15 – see here.
Landlord Expert
By Landlord Expert June 4, 2015 12:40

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