We have collated the data from almost 90 completed HMO investment surveys by different valuers all across the country. Our aim was to give property investors an idea of what a realistic valuation of their property could be.
Generally, to calculate a probable valuation, we calculate number of rooms X the average annual net rent charged per unit X of the net yield.
Of course, this is only a rough guide based on the data as valuers will base their figures on the market rent rather than a premier rent based on the quality of the property’s furnishings etc.
If someone is receiving a rent of £100 per week for 6 rooms outside of London, this gives an annual gross rent of £31,200 and an annual net rent of £26,261.04.
To calculate the probable valuation, divide this by the net yield average of 7.95 and multiply it by 100, which gives a value of £330,327 for the property.
Broken out, the calculation is as follows:
- 6 rooms X £100 weekly gross rent X 52 weeks = £31,200 annual gross rent
- £31,200 annual gross rent – 15.83% management fees = £26,261.04 annual net rent
- £26,261.04 annual net rent % by 7.95 net yield average X 100X = HMO valuation of £330,327
All of the 89 reports come from properties located outside of London.
Below are averages we calculated from the surveys analysed.
|Non-London averages (89 properties)|
|Value per unit||
|% of management fees deducted||
|Annual gross rent charged per unit||
|Annual net rent charged per unit||
|Weekly gross rent per room||
|Weekly net rent per room||
Feel free to download this information in a printable form: 2023’s HMO Valuation Calculations.