Planning refusals for houses in multiple occupation (HMOs) have more than doubled over the past five years, according to new research, raising concerns about the future supply of affordable shared housing.
Analysis of 144 English councils by property company 1st Avenue found that HMO planning refusals increased from 590 to 1,203.
While approval rates remained around 68% between 2021 and 2023, they began to fall over the following two years. So far in 2026, the approval rate stands at around 63%.
The figures come as councils across England continue to introduce stricter licensing requirements and planning restrictions for HMOs.
Article 4 Rules Add to HMO Pressure
One factor behind the increase in refusals is the wider use of Article 4 directions.
These allow councils to remove certain permitted development rights, meaning landlords may need planning permission before converting a property into an HMO.
There is no central database showing exactly how many councils have introduced Article 4 restrictions. However, the National Residential Landlords Association estimates that around 75 to 80 local authorities in England now have them.
For landlords, this can make entering or expanding in the HMO market more difficult, particularly in areas where councils are trying to limit the number of shared properties.
Could Restrictions Reduce Affordable Housing?
Paul Endacott of 1st Avenue argues that tighter controls could have consequences beyond simply reducing the number of HMOs being approved.
His concern is that demand for affordable rooms does not disappear when legal and regulated HMOs become harder to provide. Instead, tenants may look for cheaper alternatives elsewhere.
This could potentially push some renters towards smaller shared properties or informal arrangements that receive less oversight from local authorities.
That creates a difficult balance for councils. While restrictions can help prevent overcrowding and poor-quality accommodation, they may also reduce the supply of professionally managed shared housing.
Licensing Remains Important
HMO licensing has an important role in maintaining standards across the private rented sector.
Licensing requirements can cover areas such as fire safety, room sizes and general living conditions, helping councils take action against landlords operating unsafe or unsuitable properties.
However, Endacott says councils should distinguish between poorly managed HMOs and properties that are professionally run and provide useful accommodation for tenants.
The concern is that broad restrictions could affect good-quality HMOs alongside properties that genuinely need enforcement.
What Does This Mean for HMO Landlords?
The latest figures suggest that HMO landlords are facing a more challenging planning environment in parts of England.
With more councils using Article 4 directions and approval rates falling, landlords considering an HMO conversion may need to carry out more research before purchasing a property.
Local planning policies, licensing requirements and demand for shared accommodation can vary considerably between areas, so investors need to understand the rules before committing to a purchase.
At the same time, there remains strong demand for affordable rental rooms, particularly in areas where conventional rents are becoming increasingly difficult for tenants to afford.
The challenge for policymakers will be finding a way to improve housing standards without reducing the supply of safe and affordable shared homes.
As HMO restrictions continue to increase, the debate is likely to centre on whether tighter regulation is improving the private rented sector or unintentionally making affordable accommodation harder to find.
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