Real Estate

SHOCK drop in number of HMOs blamed on growth in local council licensing schemes

HMO numbers in England have dropped by 3% throughout the previous 12 months many landlords offloaded their buy-to-let inventory as an alternative of negotiating extra legislative hurdles.

Market evaluation by Octane Capital reveals that whereas there have been 511,278 HMOs in 2019/2020, this fell to 497,884 in 2020/21, pushed by the London market which noticed a 13% discount in numbers, by far the most important drop of all of the areas.

Within the capital, 11 totally different boroughs have reported a decline, with the most important in Ealing the place the variety of HMOs are down by -59%, adopted by a -58% drop in Lambeth. Different massive losers have been Redbridge, Barnet, Greenwich, Enfield, Wandsworth and Croydon.


Octane blames the laws launched in 2018 that require an HMO licence for all properties occupied by 5 or extra people who find themselves not members of 1 household, whereas all rooms should exceed a minimal measurement and might solely sleep a sure variety of folks over 10 years previous.

Nevertheless, one other of the lender’s current research discovered that the common HMO is now value £364,508, 32% greater than the everyday home, with skilled buy-to-let traders nonetheless hungry to increase within the sector, infused by the advantages of larger rental incomes and capital development.

CEO Jonathan Samuels (pictured) says the modifications imply that these reliant on the rental sector now have even much less alternative on the subject of discovering appropriate, secure lodging.

Nevertheless, he provides: “We’ve continued to fund a excessive variety of high quality HMO offers all through the pandemic and this sustained stage of curiosity from skilled traders is but to point out any indicators of decline.

Learn: The full information to renting an HMO property.

“This includes a large number of refurbishment transactions whereby investors are looking to drastically improve the quality of existing HMOs, so while volume has certainly fallen, we don’t believe this will be a long-term trend.”

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