HMO planning refusals across England have more than doubled since 2021, raising questions about the impact of tighter controls on the supply of shared rental accommodation.
Analysis of 144 English councils shows that the number of decided HMO applications increased by 87% between 2021 and 2025. Decisions rose from 1,848 to 3,454 over the period.
However, refusals increased at a faster rate. Councils rejected 590 applications in 2021, compared with 1,203 in 2025.
Approval rates remained at around 68% between 2021 and 2023. They then declined during 2024 and 2025, with early figures for 2026 putting the rate at 63%.
The findings come as more councils introduce Article 4 directions. These remove permitted development rights that can allow landlords to convert family homes into small HMOs without a full planning application.
There is no central register of Article 4 directions. However, the National Residential Landlords Association estimates that between 75 and 80 English local authorities have adopted them.
Harrow and Warrington are among the latest councils to announce plans for additional restrictions.
In areas without Article 4 directions, some small HMO conversions can take place under permitted development rights. As a result, they may not appear in planning application figures.
The planning restrictions sit alongside licensing requirements intended to regulate property standards and management.
Under the Housing Act 2004, properties occupied by five or more people from at least two households generally require an HMO licence where tenants share facilities.
Operating a licensable HMO without the required licence can result in enforcement action. Councils can impose civil penalties of up to £30,000 per offence, while tenants may seek Rent Repayment Orders.
Some local authorities also operate additional licensing schemes covering smaller HMOs.
Concerns over rental supply
The tightening of HMO controls comes as demand for lower-cost shared accommodation remains high.
Further changes to the private rented sector under the Renters’ Rights Act could also influence landlords’ decisions about how they operate their portfolios.
Students remain a significant source of demand for HMOs. Current projections suggest the shortage of student beds could reach around 190,000 by the end of the decade.
Paul Endacott of property firm 1st Avenue warned that restricting legitimate HMO development could have unintended consequences for the rental market.
He argues that reducing the availability of legally operated shared homes will not necessarily reduce demand. Instead, some renters could find themselves with fewer affordable options.
“What we’re seeing here isn’t really a story about landlords versus councils, it’s a story about where people are actually going to live when the legal, regulated options start disappearing,” said Endacott. “Every time a licensable HMO gets refused planning permission or a licence application gets turned down, that demand for a cheap room in a shared house doesn’t vanish, it just goes somewhere else.”
The NRLA has previously raised similar concerns about Article 4 directions. It argues that restrictions can particularly affect students and younger renters who choose shared accommodation.
There are also concerns that tighter controls could encourage some operators to avoid the regulatory system altogether.
With councils simultaneously increasing planning restrictions and licensing requirements, the figures highlight the growing regulatory barriers facing landlords looking to create new HMO accommodation.
“We know from enforcement patterns over the years that when regulation tightens around larger, more visible HMOs, some operators simply shift into smaller properties or informal arrangements that fall outside a council’s usual inspection regime,” said Endacott.
