Insights / Sustainability

Why HMOs are the most sustainable housing

HMOCapital · 2 January 2025 · 5 min read
Small rear extension with a rooflight, a two-seater sofa and French doors to a courtyard garden

As demand for sustainable and affordable housing rises, houses in multiple occupation (HMOs) are emerging as one of the most efficient residential models. They house more people within existing buildings while sharing resources, which makes them a practical answer to housing shortages, urbanisation and environmental pressure at the same time.

The sustainability advantages of HMOs

1. Efficient land use

Urban land is scarce. HMOs house several people within a single property, reducing the need for new development on greenfield land and limiting urban sprawl.

2. Lower carbon footprint per occupant

Shared heating, lighting and appliances mean an HMO uses less energy per person than the same number of people living alone. The result is a lower per-capita carbon footprint than traditional single-occupancy homes.

3. Optimised energy consumption

One building, one heating system and shared utilities make efficiency improvements go further. Typical measures include:

  • Centralised, well-controlled heating systems that reduce waste.
  • Smart meters and sensors that regulate electricity use.
  • Renewable energy, such as solar panels, where the building allows.

4. Less waste through shared resources

Shared kitchens and communal areas mean fewer duplicated appliances and less waste per person.

5. Retrofitting, not rebuilding

Most HMOs are created by converting existing buildings. Upgrading an older house into a modern, energy-efficient home avoids the carbon cost of demolition and new construction, and keeps the existing building in use.

Affordability and social sustainability

6. Affordable, high-quality homes

With house prices out of reach for many, HMOs give young professionals and key workers a high-quality place to live at a lower cost than renting alone.

7. Making better use of existing stock

By housing more people in existing buildings, HMOs help relieve shortages in high-demand towns without waiting for new construction.

8. Community

Well-designed shared spaces build social connection and reduce isolation. Sustainable housing is about resilient communities as well as energy efficiency.

Conclusion

HMOs combine affordability, efficient use of resources and social value. As energy rules tighten and housing pressure grows, well-run, energy-efficient HMOs created from existing houses offer a scalable answer, and one that investors, councils and tenants can all support.

For current market data and our view on timing, read the HMOCapital investment thesis.

Investor access

For family offices, institutions and qualifying private investors.

The information memorandum, financial model and terms are held in a private data room for approved professional, certified high-net-worth and self-certified sophisticated investors.