How Much Does a HMO Conversion Cost in the UK? Full Guide for Landlords

Corsol Conversions
Sep 25
4 min read

Converting a property into a House in Multiple Occupation (HMO) can be one of the most profitable strategies for landlords in the UK.

With higher rental yields compared to single lets, HMOs are an attractive option, particularly in student and professional markets.

However, the cost of converting a property into an HMO is not straightforward.

How Much Does a HMO Conversion Cost in the UK

It varies depending on the type of property, the scale of works required, and the compliance measures needed to meet legal standards.

This guide breaks down the key cost factors, typical price ranges, regulatory requirements, and the potential return on investment to help landlords budget effectively.

Key Factors That Affect HMO Conversion Costs

No two HMO conversions are the same, and the cost will largely depend on:

Property size and layout – Larger properties naturally require more work, especially if you plan to add additional bedrooms or bathrooms.
Property condition – Older or neglected buildings may need significant structural and safety upgrades.
Location – Costs in London and the South East are generally 20–40% higher than in other parts of the UK.
Level of refurbishment – A basic conversion to meet minimum standards will cost less than a high-spec finish aimed at professionals or students willing to pay premium rents.
Fire safety and compliance – HMOs must meet strict regulations, which often involve additional fire doors, alarms, emergency lighting, and escape routes.
Licensing requirements – The type of HMO licence needed can affect costs, particularly if planning permission is required.

Typical HMO Conversion Costs in the UK

While each project is unique, landlords can use the following updated ranges as a guide:

Small HMO (3–4 tenants, minimal structural work): Expect £30,000–£60,000, depending on property condition and location. Basic upgrades such as fire doors, electrics, and bathrooms are included in this range.
Medium HMO (5–6 tenants): These projects often fall between £60,000–£100,000+, especially if en-suites or significant layout changes are involved.
Large HMO (7+ tenants): Full-scale conversions can cost £100,000–£200,000+, particularly where loft conversions, extensions, or multiple en-suites are required.
Per-room costs: A useful benchmark is around £10,000–£15,000 per room. However, higher-spec finishes or properties needing extensive building work can push this figure higher.

It’s worth noting that furnishing, compliance checks, and professional fees are not always included in initial conversion quotes, so they should be factored into the budget.

Planning Permission, Licensing, and Regulations

A key part of budgeting for an HMO conversion is understanding the legal requirements:

Planning permission: Some smaller HMOs (up to six tenants) may not require planning permission, but many councils have Article 4 directions in place, meaning you cannot convert without formal consent. Always check before starting work.
Licensing: Any HMO with five or more tenants requires a mandatory HMO licence. Smaller HMOs may also need a licence depending on your local council. Licence fees typically range from £500 to £1,500, depending on property size and local authority.
Building regulations: All work must comply with building regulations, especially around fire safety, electrical systems, and structural alterations.
Fire safety compliance: This is one of the most significant costs. Fire doors, interlinked smoke alarms, emergency lighting, and fire-resistant materials are often required.

Failing to meet these standards can lead to fines and enforcement action, so compliance should always be built into your cost plan.

Hidden and Ongoing HMO Costs to Budget For

Beyond the core conversion costs, landlords should budget for:

Furnishing and appliances: Beds, wardrobes, white goods, and communal area furniture can add £5,000–£15,000, depending on property size.
Professional fees: Architect drawings, planning applications, licensing fees, and surveyor costs.
Utilities: HMOs typically include bills, so you’ll need to factor in gas, electricity, water, broadband, and council tax where applicable.
Insurance: Specialist HMO landlord insurance is usually higher than for single lets.
Ongoing compliance: Gas safety checks, electrical installation reports, fire alarm testing, and licence renewals all add to annual running costs.

HMO ROI and Yield Potential

While the upfront costs of HMO conversions are substantial, the potential returns are strong. Rental yields from HMOs are typically 8–12%, compared to 5–7% for standard single lets. With multiple income streams from one property, void periods are also less damaging.

The payback period will vary depending on the scale of the project, but many landlords recoup their investment within 3–7 years through higher rental income. Higher-spec HMOs can also achieve premium rents, further improving ROI.

However, it’s important to balance yield with management. Larger HMOs often require more intensive oversight or professional management, which comes with additional costs.

Final Thoughts

Converting a property into an HMO can be a highly profitable move, but the costs can be significant and vary widely depending on the property and the level of work required.

A small HMO conversion might start around £30,000, while larger, more complex projects can easily exceed £100,000. Factoring in compliance, licensing, and ongoing running costs is essential to avoid unpleasant surprises.

For landlords considering an HMO conversion, the key is careful planning and realistic budgeting.

Working with experienced contractors who understand the unique requirements of HMOs will save time, money, and stress in the long run.

Speak to the Experts

If you’re a landlord thinking about converting a property into an HMO, get in touch with Corsol Conversions today for a tailored, no-obligation quote. Our team has extensive experience with HMO compliance, refurbishment, and conversions, ensuring your project is completed to regulation and designed for maximum return.