England’s HMO stock levels on the decline

The stock of houses in multiple occupation (HMOs) across England has fallen by 2.4% in the last year, new market analysis by Sirius Property Finance has shown.

Figures showed that England has an estimated 489,701 HMO properties, which accounts for 2% of the country’s entire dwelling stock.

London is home to the largest number of HMOs with 145,615 properties, accounting for 4% of the capital’s homes, while the South East has 69,102 HMOs to make up 1.7% of the regional total.

The region with the fewest HMOs is the North East, where 17,378 properties account for 1.4% of the region’s dwellings, but the region where HMOs account for the smallest percentage of local homes is the East Midlands, where 21,752 properties account for just 1% of the whole housing market.

Sirius’ analysis revealed the East Midlands has recorded an annual HMO stock decline of -26.1%, the North East has seen HMO stock levels drop by a -15.8% drop, while in the South East numbers are down -6.7%. These declines, however, are not universal across all regions. The West Midlands (16.9%) as well as Yorkshire and Humber (11.2%) have recorded annual stock growth over the past year.

These current stock levels have been recorded after the government’s recently implemented changes to HMO regulation. In an attempt to improve the safety and living standards for tenants in October 2018, the government extended the mandatory licensing of HMOs to cover the vast majority of properties containing five or more people from two or more separate households. Previously, only properties with three or more storeys containing five or more people from two or more households required an HMO licence.

The new regulations mean that HMO landlords now occupy a more expensive and more complicated corner of the rental sector. As a result, Sirius believes that many have chosen to cut their losses by offloading properties rather than dealing with the added cost.

“Any legislative change designed to improve tenant welfare is a positive one on the face of it, but much like the regular buy-to-let sector, a perhaps overly heavy handed approach by the government has led to a decline in the number of HMOs available across the nation,” said head of corporate partnerships at Sirius Property Finance, Kimberley Gates.

“The implications of this decline to tenants are inevitably a higher cost when renting, due to the growing imbalance between HMO supply and demand. 

“However, as the HMO sector continues to find its feet in the wake of these legislative changes, it presents a great opportunity for investors entering the space who can hit the ground running and capitalise on high tenant demand levels. Providing they have their house in order in terms of licensing and living standards, of course.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


The UK housing market in 2024
The performance of the UK housing market in 2024 has largely exceeded many people's expectations, although challenges remain for first-time buyers due to house prices increasing and a testing rental market for many. Regional disparities, such as the North-South divide, also continue to influence housing accessibility and affordability for many buyers in pockets of the country.

Intergenerational lending
MoneyAge News Editor, Michael Griffiths, hosts Family Building Society BDMs, Amar Mashru and Arif Kara, to discuss intergenerational lending and explore ways that buyers can use family income to help increase their borrowing capacity when applying for a mortgage

Helping landlords make their cash work harder
MoneyAge Editor, Adam Cadle, talks to Family Building Society BDMs, Arif Kara and Nathan Waller, about the resilient BTL market, the wide variety of landlords that Family Building Society caters for, and how niche products like an Offset mortgage can help improve cashflow.