Drastic fall in HMO numbers as government regulations bite

The number of HMOs in England has fallen as a result of government intervention in the market.

In 2018 new regulations were introduced insisting that a House in Multiple Occupancy licence was required for properties occupied by five or more people not of one family. 

Previously, a licence was only required for properties of three storeys or more in which five or more people lived and were not members of one family. 

An analysis by Octane Capital suggests that since 2018 the number of HMOs on the market has decreased with many landlords choosing to offload their buy to let stock instead of negotiating yet more hurdles due to legislative changes.

The latest data shows that, on an annual basis, the number of HMOs in England fell three per cent from 511,278 in 2019/2020 to 497,884 in 2020/21. 

This overall national decline has been driven by the London market where the level of total HMOs has declined by 13 per cent - by far the biggest reduction of all regions

In the capital, 11 different boroughs have reported a drop, with the biggest coming in Ealing where HMOs have declined by a remarkable 59 per cent, followed closely by a 58 per cent decline in Lambeth.

Redbridge has seen its numbers halved, and Barnet’s decline sits at 37 per cent. The number of HMOs has also declined considerably in Greenwich, Enfield, Wandsworth, Croydon, Hillingdon, Merton and Tower Hamlets. 

Octane Capital chief executive Jonathan Samuels says: “It’s only right that all efforts should be made to ensure the safety and wellbeing of the nation’s tenants and that everyone is afforded the right to a basic standard of living. 

“The changes to HMO licensing have certainly looked to ensure this, but as a result, we have seen a decline in the level of operational HMOs across the rental market, particularly within London. 

“This essentially means that those reliant on the rental sector now have even less choice when it comes to finding suitable, safe accommodation.”