HMO approvals dropped past year, suggesting that tighter licensing rules are hampering the sector.
The number of approvals dropped by -5.9% in 2024, which saw 25,445 new licences issued, a reduction of 1,498 year-on-year.
Landlords commonly need to get a license from their local council to run an HMO, with rules being more stringent for those with more than five occupants. Some councils run stricter licensing schemes which can encompass properties with at least three tenants living in one home.
Hugh Gibbs, co-founder of Searchland, said: “There’s been a decline in the annual number of HMO licenses being granted by councils across Britain at a time when we arguably need more rental accommodation to ease the high demand from tenants.
“This reduction has no doubt been driven by a greater reluctance from councils due to a move towards risk-based licensing, but it’s also fair to say that tighter regulations, particularly with regard to mandatory room sizes, may have also deterred investment.
“However, not every area has seen a decline and, in fact, many regional hotspots such as Oxford, Bristol and London have seen a substantial increase.”
Some areas bucked the trend, and saw increases in the number of HMO licenses being granted last year.
In Oxford for example there were 1,823 new licenses, an annual increase of 1,341 on 2023.
Meanwhile, licence approvals also saw an annual increase of more than 500 in the City of Bristol (+838), Lambeth (+759), Hammersmith & Fulham (+544), and Charnwood (+533).
Britain’s HMO licence hotspot is Lambeth in London, where 2024’s total of 2,515 new licence approvals is equivalent to 10.50% of the national whole.