— Free UK Property Tool —

HMO Yield Calculator

Per-room rental analysis for UK Houses in Multiple Occupation. All-bills-included costs, HMO licensing, ICR stress test, Section 24 modelling, and per-room profit metric. Compare your HMO against a standard BTL on the same property.

Per-Room Analysis All-Bills-Included HMO Licensing ICR Stress Test Section 24 Impact Cash-on-Cash ROI

HMO Property Details

Property
Purchase Price
£
Deposituse the selected product requirement
%
Property Nationlicensing and purchase tax differ
Number of Lettable Roomsused for income, not licence status
rm
Occupantspeople forming the HMO
Householdsunrelated household groups
Storeysproperty context; verify national and local rules
Shared facilities
Kitchen, bathroom or toilet shared
Additional-property SDLT rates
England and Northern Ireland only
Purchase Tax Overrideenter LBTT/LTT estimate for Scotland/Wales
£
Purchase Legal Feescurrent quote
£
Survey / Valuationcurrent quote
£
Rental Income (per-room basis)
Average Rent per Room£/week
£
Void Allowance per Roomweeks empty/year per room
wk
Mortgage
Mortgage Rateuse a current product quote
%
Mortgage Termyears
yr
Interest-only mortgage
match the repayment basis in your quote
ICR Stress Ratetarget lender's criterion
%
ICR Referencetarget lender's criterion
%
HMO-Specific Annual Costs
All Bills Includedcouncil tax + utilities + internet + TV
£
Cleaner (Communal Areas)£/year
£
Maintenance Reserve% of gross rent
%
Letting Agent Feeuse a current management quote
%
Landlord InsuranceHMO insurance £/year
£
Garden Maintenance£/year
£
Fire / Gas / Electrical Certsannual safety checks
£
Licensing & Setup
HMO Licence Costcouncil-set; term can be shorter than 5 years
£
Licence Termyears
yr
Initial Setup Costfire doors, alarms, conversion
£
Tax
Effective Income Tax Ratesimplified marginal rate
%
Owned via limited company
Selected effective company rate; before extraction tax
Effective Corporation Tax Ratesimplified; confirm marginal relief
%
How this calculator works — formulas & sources
Gross HMO Yield
Gross Yield = (Rooms × Weekly Rent × 52) ÷ Purchase Price × 100%
Effective Annual Rent = Rooms × Weekly Rent × (52 − Void Weeks)
Gross yield uses scheduled rent before voids; effective yield and cashflow apply the void allowance. Compare the resulting net figures with a standard BTL. HMO vs BTL · Rent vs Buy Explained
All-Bills-Included Costs
Annual Bills = Gas + Electric + Water + Internet + Council Tax
Per Room Bill Cost = Annual Bills ÷ Number of Rooms
For all-bills-included letting, enter current council tax, tariff and service quotes for the property. Usage, occupancy and contract terms can materially change the result; no market benchmark is assumed. HMO vs BTL · Rent vs Buy Explained
Net HMO Yield
Net Yield = (Effective Annual Rent − All Running Costs) ÷ Purchase Price × 100%
Running Costs = Agent Fees + Maintenance + Insurance + Bills + Licensing + Other
Net yield depends on the room rents and property-specific bills, management, maintenance, insurance, licensing and void assumptions entered above. Compare HMO and single-let scenarios on the same acquisition cost. HMO vs BTL · Stamp Duty (SDLT) Explained · Rent vs Buy Explained
ICR Stress Test
Stress ICR = Scheduled Annual Rent ÷ (Loan × Entered Stress Rate)
Compare with the entered ICR reference
This is an indicative stress test, not a lending decision. Replace both defaults with the target lender's current criteria; rent evidence, top-slicing, product terms and licence conditions also vary. HMO vs BTL · Rent vs Buy Explained
Per-Room Profit
Monthly Profit Per Room = Annual Net Cashflow ÷ 12 ÷ Number of Rooms
Annual Net Cashflow = Net Annual Rent − Tax − Annual Mortgage Cost
Per-room cashflow normalises scenarios with different room counts. The required amount is personal to the operating workload, risk, finance and alternative uses of capital; the calculator does not prescribe a target. HMO vs BTL
Section 24 & Ltd Co
Individual: basic-rate credit is capped by simplified property-profit and finance-cost limits
Ltd Co: interest deducted before the selected effective Corporation Tax rate
The residential finance-cost restriction applies to qualifying HMO finance costs held by individuals. This page omits the adjusted-total-income cap and carry-forward; use the Section 24 calculator for those inputs. Section 24 Explained · HMO vs BTL
Official sources: GOV.UK HMO overview · England and Wales HMO licensing · Scottish HMO licensing guidance · HMRC finance-cost guidance

HMO Results

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Per-Room Profit per Month
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⬤ Calculating…
Yields & Returns
Gross Yield
—
scheduled rent before voids
Net Yield
—
after running costs
Monthly Cashflow
—
total, all rooms
Cash-on-Cash ROI
—
return on cash invested
ICR Stress Test
ICR —
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Annual Breakdown

Download the Full Excel Version

Includes per-room scenario modelling, 5-year cashflow projection, Ltd Co vs personal comparison and full HMO analysis guide.

Download — £14.99
How it works

Why HMO yields look bigger than they are

Room-by-room income can produce a different headline yield from a single let, but the result depends on the property, achieved rents, simultaneous occupancy and HMO-specific costs. Compare like-for-like scenarios with current local evidence.

PER-ROOM RENT
The HMO pricing model

The calculator multiplies entered weekly room rent by room count and available weeks. Compare that scheduled and void-adjusted income with verified room comparables and a genuinely comparable single-let rent. Room count does not guarantee simultaneous occupancy or a yield advantage. HMO vs BTL · Rent vs Buy Explained

ALL BILLS INCLUDED
Tenants don't pay utilities

Where rooms are let all-bills-included, the landlord normally carries council tax, utilities and connectivity costs. Enter current property-specific quotes and stress-test usage rather than relying on a national range. HMO vs BTL · Rent vs Buy Explained

HMO LICENSING
Licensing depends on nation, occupants and households

In England, five or more occupants forming two or more households usually triggers mandatory HMO licensing, while councils can license smaller HMOs. Scotland, Wales and Northern Ireland use different definitions and schemes. Licence fees and terms are council-specific; in England a licence may run for up to five years. Check the relevant national rules, council licensing, planning and Article 4 position before purchase. Stamp Duty (SDLT) Explained · HMO vs BTL

ARTICLE 4 DIRECTION
Check the location-specific planning position

An Article 4 direction can remove a permitted-development right in a defined area, so a conversion that would otherwise be permitted may need planning permission. Coverage and policy are council-specific. Planning and HMO licensing are separate; verify both before purchase and model a lawful alternative use. HMO vs BTL

ICR STRESS TEST
HMO lender criteria vary

HMO products can use stressed ICR tests. The stress rate, threshold, rent evidence, top-slicing and licence conditions are lender- and product-specific. Enter the target lender's current criteria and treat the result as an indicative screen, not a lending decision. HMO vs BTL · Rent vs Buy Explained

PER-ROOM PROFIT
A room-count comparison metric

Per-room monthly cashflow helps compare scenarios with different room counts. It is not a recommended threshold: consider workload, tenant turnover, compliance, finance risk and the return available from a comparable single-let. HMO vs BTL · Rent vs Buy Explained

FAQ

Common questions

What is an HMO and when do I need a licence?
HMO definitions and licensing differ by UK nation. In England, three or more people forming two or more households who share facilities is a common definition, while five or more occupants usually triggers mandatory licensing; councils can license smaller HMOs. Scotland, Wales and Northern Ireland have their own regimes. Verify the property with the relevant council before purchase or conversion. Stamp Duty (SDLT) Explained · HMO vs BTL
Why are HMO net yields lower than the headline gross yield suggests?
Room-by-room gross income can look high because it ignores council tax, utilities, management, maintenance, licensing and voids. Enter property-specific costs and compare the resulting net acquisition yield with a like-for-like single-let scenario; there is no reliable UK-wide spread. HMO vs BTL
How does Section 24 affect HMO landlords?
For individual landlords, residential finance costs are restricted rather than deducted from rental profit. The basic-rate tax reduction is capped by qualifying finance costs (including eligible amounts brought forward), property-business profit and adjusted total income above the personal allowance; unused finance costs can be carried forward. A company may deduct qualifying interest when calculating its profit, but Corporation Tax, extraction tax, finance terms, accounting costs and any transfer taxes must all be modelled before comparing structures. Model the comparison. Section 24 Explained · HMO vs BTL
What is Article 4 Direction and why does it matter?
An Article 4 direction can remove a permitted-development right in a defined area, so an HMO conversion that would otherwise be permitted may need planning permission. Coverage, start dates and local policies are location-specific. Check the council’s current planning map and written guidance before purchase. Planning permission and HMO licensing are separate requirements, and obtaining one does not guarantee the other. Model a lawful alternative use as part of the downside case. HMO vs BTL
What's a realistic per-room profit per month?
Per-room monthly cashflow normalises results across different room counts. The required figure depends on workload, compliance, finance, tenant risk and alternatives; use the output for scenario comparison rather than as a universal target. HMO vs BTL
Why are HMO mortgages more expensive than BTL?
HMO lending criteria can differ from single-let products because of licensing, tenancy structure and property configuration. Rates, fees, deposits, experience rules, stress rates and ICR thresholds are product-specific; replace the defaults with a current quotation. HMO vs BTL · Rent vs Buy Explained