According to analysis by Platinum Property Partners, HMO landlords would still be profitable even if rates rose by 2.5%. These properties typically generate gross monthly profits of £2,565, compared to £292 for standard buy-to-lets.

A HMO is defined as a house occupied by more than 2 people who are not all members of the same family.

Many landlords have become fearful of the impact interest rate rises will have on their portfolios, especially those with many properties.

HMO landlords currently receive £3,298 of monthly income compared to £754 for standard rentals. If rates rose to 3% the HMO landlord would still make a profit of £2,139 each month compared to a loss of £55 otherwise.

Steve Bolton, founder and chairman of Platinum Property Partners, said landlords needed to protect themselves against future rate rises and other changes.

“With many changes on the horizon for landlords, including the proposed restrictions to mortgage tax relief and looming interest rate rises, it’s never been more crucial to have a decent cushion of rental income to absorb any rising costs,” he said.

“However, many landlords are failing to correctly calculate their returns, and our earlier research shows that a worrying number entered the buy-to-let market with very little forward planning.

“Without a clear picture of what they earn from their buy-to-let investment, a landlord is more vulnerable to market changes. Landlords must have a clear strategy and plan ahead to be able to accurately assess how futureproof their investments are.”