HMO numbers continue to nosedive including 23% drop in London

The number of Houses of Multiple Occupation (HMOs) in England is continuing to nosedive, official statistics seen by LandlordZONE reveal.

Data from the Office of National Statistics reveals that the number of HMOs recorded by England’s local authorities has dropped by 9.5% since 2018 from 515,904 to 476,076.

That year is when new regulations were introduced requiring that larger House in Multiple Occupancy properties needed to licenced, namely those occupied by five or more people ‘not of one family’.

Until then, the requirement was more about how many stories a larger HMO property featured.

The decline in England has been driven largely by the number of HMOs in London which have dropped from 186,099 in 2018 to 142,483 last year, or a decline of 23%.

Squeezed out

Comparing the data, one explanation for this is that the kind of people who rent properties within HMOs are being squeezed out of the capital and into surrounding regions.

Councils within the SE, SW and East of England as well as the West Midlands reported increases of up to 10% in the number of HMOs within them.

But the drop in London has also been pinned by commentators on the extra legislative burdens brought in during 2018 and the extra costs associated with them.

Octane Capital, which is one of the lenders involved in this sector, says that although “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…as a result, we have seen a decline in the level of operational HMOs across the rental market”.

One other likely reason is that London councils tend to be the most aggressive both in adopting and enforcing the existing legislation on licencing, and also bringing in tighter planning rules for HMOs.

Councils have three choices when regulating HMOs - Mandatory licencing of larger HMOs which covers the whole of England, 'additional' licencing which covers smaller HMOs and selective licencing, which covers all rented homes regardless of their type.