Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

HMO Planning Refusals Double as Councils Tighten Controls

Planning refusals for Houses in Multiple Occupation (HMOs) across England have more than doubled since 2021, according to analysis of 144 English councils. The increase in refusals comes as more local authorities introduce tighter controls on shared rental accommodation.

Between 2021 and 2025, the number of decided HMO planning applications rose by 87%, from 1,848 to 3,454. However, the number of refusals increased at a faster rate, with councils rejecting 590 applications in 2021 compared to 1,203 in 2025. Approval rates for HMO applications remained at around 68% between 2021 and 2023, but declined during 2024 and 2025. Early figures for 2026 show the approval rate at 63%.

The report highlights that more councils are introducing Article 4 directions, which remove permitted development rights that would otherwise allow landlords to convert family homes into small HMOs without a full planning application. The National Residential Landlords Association estimates that between 75 and 80 English local authorities have adopted Article 4 directions. 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 still take place under permitted development rights and may not appear in planning application figures. Alongside planning restrictions, licensing requirements under the Housing Act 2004 regulate property standards and management for HMOs. Properties occupied by five or more people from at least two households generally require an HMO licence where tenants share facilities. Councils can impose civil penalties of up to £30,000 per offence for operating a licensable HMO without the required licence, and tenants may seek Rent Repayment Orders. Some local authorities also operate additional licensing schemes for smaller HMOs.

The tightening of HMO controls comes as demand for lower-cost shared accommodation remains high. Students are identified as a significant source of demand for HMOs, with current projections suggesting a shortage of student beds could reach around 190,000 by the end of the decade. The National Residential Landlords Association has previously raised concerns that Article 4 directions and other restrictions can particularly affect students and younger renters who rely on shared accommodation.

For letting agents and inventory clerks, these developments highlight the increasing regulatory barriers facing landlords seeking to create new HMO accommodation, as well as the potential impact on the supply of affordable shared housing.