HMO licences hit record highs across England

The number of HMO licences issued in England surged to 27,177 last year, according to data firm Searchland.

Since the introduction of mandatory HMO licensing in 2018, the number of licences has seen a remarkable increase.

Starting from 7,839 licences in 2018, the figures rose sharply to 26,312 in 2020. However, the numbers dipped to 23,712 in 2022 before rebounding last year.

Growth in HMO licences

Searchland says the growth in HMO licences is driven by a combination of new licensing schemes and a robust rental market.

The East of England, saw significant gains, with council-reported licences increasing from 580 to 1,053.

The North West and North East regions also showed positive trends.

However, some regions experienced notable declines.  Yorkshire and Humber saw their HMO licences drop from 2,097 to 720, and the West Midlands reported a decrease from 1,114 to 454.

HMOs excellent opportunity for investors and landlords

Searchland’s data, based on HMO licence end dates, shows how local authorities vary in their data reporting. The firm believes these differences, along with missing data, might explain the drops seen in some areas.

Searchland Co-Founder and CEO Mitchell Fasanya says while HMOs may not be universally favoured, they are crucial in offering affordable housing options to tenants in urban areas, often with severe rental shortages.

He said: “Although the implementation of licensing regulations has been inconsistent – much like the HMO data councils are sharing – they remain an excellent opportunity for investors and landlords looking to diversify their portfolios, especially as the shortage of rental properties continues to drive demand.”

According to Shawbrook Bank, HMOs are becoming increasingly popular among landlords. The lender says there has been a rise in HMO investment from non-portfolio landlords, increasing from 17% to 21%.