Hello readers,

This discussion is something I find comes up fairly often in conversations I have with investors, and it’s certainly worth giving some focus to. With the recent changes to Article 4 and further licensing changes proposed, landlords could certainly be forgiven for asking the question ‘is it worth it?’ and, of course, when it comes to any investment, it needs to make financial sense to sustain it.

Over the next few paragraphs, I will ask this question, look at three key points and draw a conclusion – hopefully you find it helpful!

Gross rental yields continue to rise

The first point to consider is how average gross rental yield as every quarter for the past four this has risen. From 8.48% in Q3 2025 to 8.9% in Q2 2026. Remember – HMOs remain the highest-yielding property type within Kent & Medway, sitting ahead of multi-unit blocks, flats, terraces and detached homes.

Demand remains strong

Kent & Medway’s HMO market has very strong demand from potential tenants and I don’t see this changing soon. For high-spec HMOs is good locations, there is no problem filling rooms and the calibre of tenants for this type of property remains high.

Because of the tightening of regulation in general (including Article 4, but also the Renters’ Rights Act and more), there has been slower growth and we have seen some landlords making the decision to sell up. This has only helped demand, simply because there has been a constriction to supply.

For the landlords who choose to stay, this is certainly a positive thing and this is backed up by the numbers, wich SpareRoom’s Q2 2026 Rental Index showing UK room rents up 0.5% year-on-year (6.7% over the past three years), with the South East one of the strongest-performing regions at +9.5% over that three-year stretch.

At the same time, national flatshare supply fell 3.2% year-on-year the first annual drop after three straight years of growth.

Regulation: A killer or a filter?

This is an interesting question! As I mentioned above, the tightening of regulation has led to a constriction in supply due to landlords choosing to exit or not expand – this is something we can’t

skim over, but what does that mean for those who stay?

My personal thought is that the savvy landlord, who knows their numbers, maintains market rents and keeps costs under control can only but benefit. Provided their property is high spec, those who choose to stay should benefit from increased yields, better quality tenants and ongoing capital growth.

The challenge here comes if landlords are not within a limited company or where their properties require significant works to bring them up to spec. For these investors, I am not saying that you should automatically sell, but I do think it is prudent to properly assess the benefits of staying.

Landlords may need to change their mindset

I do think that something we all need to do is adjust our mindset. Yes, long gone are the days where you can purchase a property in your own name, get a low-price mortgage, do minimal work and get outstanding capital appreciation.

Also, gone are the days of flying under the radar of regulation and compliance – we are in a new era for rental property, and it’s one of higher standards (great for tenants – but more expensive), potentially slightly lower profit and increased demand (for now).

Yes, I said potentially lower profits. So why bother then? That’s because we need to remember what property delivers and that is consistent, with stable returns with leveraged capital that can be accessed fairly easily and an asset that continues producing positive cashflow.

We need to think of other investment alternatives, all which have their place and part to play in a diversified portfolio (and I would recommend looking into all the options to balance your risk):

• Pension: Economic-linked returns that cannot be accessed until you are 55 and are now pulled within IHT calculations (unlike property within a property structured and planned limited company, where exposure can be managed)
• Stocks and shares: I agree that you could achieve stronger returns here if you know what you’re doing, but you are open to the ups and downs of the economy and will need to consider IHT
• Index funds: Largely very similar risk to stocks and shares, but this within a limited company structure. Properly structured, exposure to IHT here can be reduced.

So, do I think investing in an HMO within Kent / Medway is worth is in 2026? The answer here all depends on your goals. If you’re looking to ‘make a quick buck’ then the answer is no, but if you’re looking for a stable investment that will continue producing returns despite the economic headwinds then yes, absolutely. Yields remain strong and demand is there, not going away any time soon!

I’d be interested to hear your thoughts on this! The best way to reach me is by emailing hasan@home-share.co.uk and I’d welcome any comments or feedback you may have.

Hasan