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Councils issue record number of HMO licences

street of HMOs

An increase in licensing schemes pushed the number of HMO licences issued in England up to a record-breaking 27,177 last year.

Data firm Searchland reports that this figure has jumped from 23,712 in 2022 and from 7,839 back in 2018 when mandatory HMO licensing came into force.

Big gains have been seen in the East of England where the number of licences reported by councils jumped from 580 to 1,053, as well as the North West – up from 940 to 1,788 - and in the North East - from 562 to 1,193. However, there were significant falls in certain regions including Yorkshire/Humber where numbers dropped from 2,097 to 720, and in the West Midlands, from 1,114 to 454.

Complete data

Searchland used HMO licence end dates to glean data and explains that local authorities’ different approach to collating information, and even a failure to provide complete data, could account for the fall in numbers.

It explains that a number of new additional licensing schemes for smaller HMOs account for some of the large increases in HMOs seen around the country and believes the final figure would be much greater across all regions if all data could be collated.

Urban areas

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.

“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,” he adds.

HMOs – with their higher rental yields than traditional lets - are becoming more popular among landlords as many turn to them as a ‘surer bet’ than other types of rental property, according to lender Shawbrook bank, which reports that HMOs made up 27% of all its business in both 2022 and 2023 but had already risen to 34% this year.


Hmo licensing