2023’s HMO Valuation Calculations

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.

For example:

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.

Feel free to download this information in a printable form: 2023’s HMO Valuation Calculations.