Frequently asked questions
Everything you need to know before your first HMO investment. Can't find what you're looking for? Browse deals and send us an enquiry - we're happy to talk it through.
What is an HMO?
A House in Multiple Occupation (HMO) is a property let out room-by-room to multiple unrelated tenants, each with their own tenancy. Because rent is collected per room rather than per property, HMOs typically produce a higher rental yield than a standard single-let buy-to-let.
What does Prosper Housing actually do?
We source HMO-ready properties, negotiate the purchase price down on your behalf, and project-manage the refurbishment to bring the property up to full HMO licensing standard using our own contractors and refurb contracts. Once it's tenanted, we sign a 5-year fully managed lease with you - from that point on we handle tenants, rent collection, and maintenance, and you receive a fixed monthly income.
What happens after the 5-year lease ends?
Near the end of the term we'll be in touch to discuss your options: renewing the managed lease, taking over self-management of the tenancies, or selling the property. Nothing happens automatically - it's a conversation with you before the term expires.
What is LHA, and how does it affect my rent?
LHA (Local Housing Allowance) is the government's benchmark rate for housing benefit in a given area, published per room size (a "shared accommodation rate"). We use published LHA rates as a conservative baseline when projecting rental income, since room-by-room rents in most HMO markets track close to this figure. Actual achieved rent depends on the local market and tenant mix.
How is net yield calculated?
Net yield on each deal is the projected annual rent divided by the total cash required to complete the deal (purchase price, stamp duty, refurbishment, legal fees, and our sourcing fee combined) - not just the purchase price. This gives a more realistic picture of your actual return on the cash you put in, since it accounts for every upfront cost, not only the headline purchase price.
Is the net yield the same as what I'll actually receive?
Net yield describes projected rental income relative to cash invested; if you use a mortgage rather than buying in cash, your actual return on your own deposit will differ once mortgage interest is deducted. Use the mortgage calculator on each deal page to see a leveraged, interest-only estimate based on your own deposit.
Why is some information hidden until I log in or make an enquiry?
We publish enough on each deal - price, projected rent, and net yield - to judge whether an opportunity is worth a closer look. Full details (exact address, bedroom counts, itemised fees, lease terms) unlock once you leave your contact details or log in. This isn't about hiding anything; it lets our team follow up properly rather than a deal being lost in a crowd of anonymous browsers.
What's the social impact angle?
We work with housing providers to place tenants affected by the UK's housing shortage - including people facing homelessness and those in the asylum housing system - into the HMOs we convert. It's not a trade-off against your return: investors get one of the sector's stronger yields, and the property provides a well-managed, licensed home for someone who needs one.
Do I need a mortgage, or can I buy in cash?
Either works. Deals are listed and their headline net yield is calculated on an all-cash basis. If you're using a mortgage, use the calculator on each deal page - it defaults to a 25% deposit (the standard requirement for most HMO mortgage products) but you can adjust it to see how your own numbers change the return.
How do I get started?
Create an account, browse live deals, and save the ones you're interested in. When you're ready, make an enquiry on a specific deal and a member of the team will call you to talk through the numbers and next steps.