Applications for Houses in Multiple Occupation (HMO) licences in the UK have risen 40% since 2018, according to data obtained through Freedom of Information requests to local councils.
The research, conducted by specialist insurance provider Just Landlords, shows applications increased from 41,162 in 2018 to 57,725 in 2024, indicating a shift in landlord investment strategies towards shared accommodation.
Regional variations
The data reveals significant geographical differences in HMO activity. Edinburgh leads with an average of 5,158 applications annually, followed by Oxford with 2,458, Bristol with 1,491, Southwark with 1,412, and Tower Hamlets with 1,394.
Several areas have experienced rapid growth rates. Sandwell recorded the highest increase at 964%, with applications rising from 28 in 2018 to 298 in 2024. West Lancashire saw growth of 886%, Tower Hamlets 750%, Guildford 742%, and Waltham Forest 481%.
Clark Ross, Managing Director at Just Landlords, said: “We’re witnessing a major evolution in the UK rental market. An increasing number of landlords are moving away from traditional lets in favour of HMOs, to help meet the growing demand for flexible, affordable housing solutions.”
Ross noted a geographical shift in investment activity: “While London remains a cornerstone of the market, there has been huge growth in the Midlands and the North, with some areas seeing application numbers increase by nearly 1,000% since 2018.”
Enforcement and refusal rates
Despite increased regulatory scrutiny, with council inspections up 83% since 2018 and enforcement actions rising 180%, landlord interest in the sector continues to grow. This trend contrasts with recent declines in traditional property sales, suggesting investors are seeking alternative rental models.
Some councils maintain high refusal rates for HMO licence applications. Blackpool has the highest refusal rate at 70%, followed by Fenland at 51% and Sandwell at 48%.
The growth in HMO applications comes as the rental market faces pressure from affordability concerns and changing tenant demographics. The shift towards shared housing models reflects broader changes in the UK property sector, where investment capital has become increasingly selective about deployment strategies.