A property investor with large HMO developments says it has never been a harder time to be a landlord in the UK, as rising regulation, tax and costs squeeze the sector.
Henry Davis, who moved from County Sligo to London in 1988, became an accidental landlord after a neighbour offered him a house in the early 1990s, a deal that set him on a path into property development.
From that single purchase, he has built up a substantial portfolio and says property has been his main source of income since the early 2000s.
Speaking to The i Paper about how he got into property, Henry, in his 50s, said: “It was 1992, and I wasn’t motivated at all, but my neighbour in London offered to sell me their house cheaply, so I went for it.
“I didn’t have the deposit, but my neighbour, who was my drinking buddy at summer BBQs in our adjoining back gardens, offered to lend me the money. I got drunk and agreed to buy the house and after, we had a massive party in our gardens over a bank holiday weekend.
“We have remained lifelong friends ever since and still reminisce about that wild party we had over three decades ago.”
From that first house, his involvement in property expanded into development and higher density housing, eventually moving into HMOs.
A HMO, or house in multiple occupation, is a property rented by at least three people from different households who share facilities such as a kitchen or bathroom.
Over time, Henry has developed two major HMOs in London and Liverpool, including a 24-bed property bought at auction and a 16-bed conversion of a derelict pub that had been empty for 25 years.
He said: “The 24-bed HMO only needed minor refurbishment. But the other one was a total ruin and had been empty for 25 years.
“This was very challenging and nearly gave me a nervous breakdown. In hindsight, I should have demolished it and started again, but I wanted to save the heritage of an amazing building.”
Henry says the sector has become significantly more difficult to operate in, with rising regulation, taxation and compliance costs putting increasing pressure on landlords.
He argues that government policy, particularly around HMOs, has added layers of complexity that make day-to-day management more expensive and time consuming.
Henry, who is also a property writer, explained: “I don’t expect the government to feel sorry for landlords or help us, but the situation needs to be financially viable.
“If the current trajectory continues through 2026, landlords will be taxed and legislated out of business, further driving up rents due to reduced property supply in the market.
He said there are “consequences” of “disincentivising investment in buy-to-let properties,” as he believes is happening.
Looking ahead, the forthcoming Renters’ Rights Bill is also expected to reshape parts of the private rented sector, with proposed changes aimed at strengthening tenant protections and reforming tenancy arrangements.
Landlords will also face a higher rate of income tax from next April – two percentage points higher than the current rate.
Despite the challenges, Henry says that bigger HMOs are easier to make work than standard buy-to-lets.
He has used specialist development lender Together Loans to fund some of his projects, which he says was better suited to complex property projects than mainstream banks.
He said: “In my experience, growing a portfolio becomes difficult if your lender doesn’t understand and support you, forcing you to waste time dealing with most lenders, whom I call ‘robot form fillers’ or ‘tick-box lenders’.”
By the early 2000s, property had become his main source of income during a period of rapid house price growth across the UK. He says he wishes he had bought more at the time.
He points to a combination of tax changes, tighter HMO licensing rules, and higher operating costs as key pressures on profitability.
Rising utility bills have also hit hard, he adds, particularly as HMO landlords typically cover energy and water costs for multiple tenants, which he says has steadily eroded margins.