Cambridge Property Market for HMOs: Is There Still Room to Grow?

The Cambridge property market has long been a magnet for investors seeking strong rental yields and reliable occupancy. In particular, Houses in Multiple Occupation (HMOs) have been one of the most profitable strategies. But with tightening regulation, increased supply, and shifting tenant dynamics, many landlords are asking the same question: is there still room to grow in the HMO space?

Current Demand from Students, Professionals, and Migrant Workers

HMOs remain in high demand across Cambridge thanks to the city’s diverse tenant base. Students from the University of Cambridge and Anglia Ruskin University fuel year-round demand in areas like Mill Road, East Road, and Cherry Hinton. Meanwhile, professionals working in the biomedical campus, science parks, and city centre offices are increasingly opting for room-based rentals due to flexibility and affordability.

Migrant workers and newcomers to the UK—many on short-term contracts or trial periods—also form a consistent segment of HMO tenants. These tenants typically prioritise location, furnishings, and inclusive pricing, making modern, well-managed HMOs highly attractive.

In short: the demand hasn’t disappeared. But tenants are now more discerning. They expect high-quality communal spaces, fast maintenance response, and clarity around bills and shared responsibilities.

Licensing Trends and HMO Regulation in Cambridge

Local authorities are placing HMOs under increasing scrutiny. In Cambridge, mandatory licensing applies to properties with five or more tenants, but selective and additional licensing schemes continue to expand. As of 2025, landlords face tighter rules on minimum room sizes, fire safety compliance (including interlinked alarms and escape routes), and regular inspections.

Cambridge City Council has also increased its focus on rogue landlords, with heavier fines for non-compliance. This regulatory pressure has raised the bar—and raised the costs—for would-be HMO operators. However, those who invest in compliant, well-run HMOs can still reap above-average returns. The key is professional management and proactive compliance.

Areas with Room for New HMO Investment

While central Cambridge is relatively saturated, opportunities still exist in:

• Chesterton and Abbey: Close to transport links and business parks, yet still affordable.

• Romsey and Arbury: Popular with both students and young professionals.

• North Cambridge (Kings Hedges): Benefitting from planned infrastructure and employer expansion.

What these areas share is rental demand combined with lower acquisition costs than city centre zones. Careful sourcing, layout reconfiguration, and proper licensing make these areas ideal for new HMO conversions or upgrades.

The market may not offer the same low-hanging fruit as five years ago, but data-backed investment in the right neighbourhoods still yields results. Especially if the property is managed to a high standard.

How Cambridge Stays Helps Landlords Enter or Expand in the HMO Market

At Cambridge Stays, we help landlords navigate the complex world of HMO investment. From sourcing and conversion planning to licensing, tenant screening, and ongoing compliance, our full-service approach removes the friction.

We start by analysing your goals and matching them with areas that suit your budget and risk profile. If you already own a single let, we can help assess whether conversion to HMO is feasible and profitable. We also handle communication with Cambridge City Council, contractors, and tenants to ensure a smooth operation year-round.

Our professional HMO management includes:

• Compliance monitoring

• Rent collection by room

• Issue tracking and maintenance resolution

• Utility management and cleaner coordination

• Regular inspections and safety checks

We don’t just keep your property legal—we keep your tenants happy and your income flowing.

Interested in HMO returns? Let’s assess your options.

The Cambridge HMO market is no longer a free-for-all—and that’s a good thing. It rewards landlords who play by the rules, deliver quality, and partner with the right experts. If you're wondering whether to invest, expand, or convert, Cambridge Stays is here to help. Let’s review your options and find the strategy that fits your future.