HMO market in England shrinks by 21,000 properties

HMO market in England shrinks by 21,000 properties

10:47 AM, 3rd February 2023, About A year ago 4

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England’s house in multiple occupation (HMO) market is still shrinking despite a growing need for affordable rental accommodation, a survey reveals.

The latest figures from Octane Capital show that the number of HMOs has shrunk dramatically by 21,000 properties in the last two years with landlords leaving the sector and tighter licensing regimes being potential reasons for the fall.

The lender says that in 2020/21 there was a -1.7% fall in HMO numbers, and this decline has accelerated with the latest figures showing a -2.4% fall.

The data shows there are 489,701 HMOs in England, down from 2019’s figure of 510,776.

‘HMO stock levels have continued to slide’

Octane Capital’s chief executive, Jonathan Samuels, said: “HMO stock levels have continued to slide since the introduction of tighter licensing rules by the government at the back end of 2018 and there are now some 21,000 less HMOs available across England than there were just two years ago.”

He added: “Any attempts to raise living standards for the nation’s tenants should be welcomed, it’s imperative that we also incentivise investors to remain within the sector.

“Failing to do so will only see the level of available rental properties continue to fall, driving the cost of renting ever higher in the process, at the expense of the nation’s renters.”

HMO stock levels down

The East Midlands has seen the largest reduction, with HMO stock levels down by 26.1% in a single year.

The North East saw its HMO stock decline by 15.8%, while the South East (-6.7%), London (-5.2%), and North West (-1.6%) have also recorded drops.

There has been some good news as some regions have seen an increase with HMO stock levels rising over the last year, with numbers in the West Midlands increasing by +16.9%, Yorkshire and the Humber (+11.2%), the South West (+0.6%) and the East of England (+0.6%).

London remains home to the greatest proportion of HMO properties, accounting for 29.7% of England’s total stock, or 145,615 properties.

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Reluctant Landlord

12:23 PM, 3rd February 2023, About A year ago


in Birmingham where there is a DIRE need for (lower end of the market) HMO accommodation, the council have banned any new applications to be granted in certain postcode areas because of issues with 'this type of tenant'.

Talk about wanting your cake and eating it!

No LL in their right mind would be entertain setting an HMO in any other 'non currently banned' areas for fear of the same happening... the same tenants seem to go round the loop so the risk is not only obvious but will only just increase.

LL are voting with their feet and letting LC's stew in their own crock of poop they self generated....

Reluctant Landlord

12:24 PM, 3rd February 2023, About A year ago

just look at auction sites to see how many HMO's are currently up for sale....


13:00 PM, 3rd February 2023, About A year ago

Firstly it would be useful to know if the loss is Mandatory HMO 5+ bedrooms or the smaller HMOs 3-4Bedrooms). As supply of HMO reduces (I am not surprised as they are a lot of work/ tenant turnover but good yields BUT lots more council red tape) then those LLs that stay in HMO (including the 'below licencing radar' LLs)will see competitive bidding for rooms within HMOs (which is the cheapest form of PRS).

For example Greenwich Borough Council admitted 79% uptake of mandatory HMOs and a really poor 23% of council led discretionary 'Additional HMOs' after a 5 year scheme. I suspect that some LLs are selling and others are taking only two tenants for the 3-4 bed HMOs . Either way it is reducing supply of the ROOMs which is bad for tenants.

Ian Simpson

18:49 PM, 4th February 2023, About A year ago

Really unsurprising this... Tax + Regs + high interest + High Energy costs + unable to evict + EPC regs looming... You would need to be a complete head-in-the-sand ignoramus to be investing in this market at the moment!! Thank God I got rid of all mine!! Sorry to the fifty-odd tenants who lost their homes, but you can thank Michael Gove and George Osborne for that!!

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