HMO planning refusals have more than doubled since 2021, prompting warnings that restricting legitimate shared housing could push more renters towards informal and potentially unregulated accommodation.
Analysis of 144 English councils shows the number of decided HMO applications increased by 87% between 2021 and 2025, rising from 1,848 to 3,454.
Over the same period, refusals more than doubled from 590 to 1,203. Approval rates remained at around 68% between 2021 and 2023 before falling during 2024 and 2025, with early 2026 figures putting the rate at 63%.
Paul Endacott (main picture, inset), property expert at 1st Avenue, says the figures raise questions about where tenants who rely on relatively affordable shared accommodation will live as legitimate HMO supply becomes harder to deliver.
DAVID vs GOLIATH
He says: “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.
“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.”
ARTICLE 4 RESTRICTIONS SPREAD
The tightening comes alongside the use of Article 4 directions by councils to remove permitted development rights that can otherwise allow houses to be converted into small HMOs without a full planning application.
There is no central register covering Article 4 directions, but the National Residential Landlords Association estimates that around 75 to 80 English local authorities have introduced them.
Endacott says: “The uncomfortable truth is that somewhere else is often less visible and less safe.
“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.”
Planning requirements also sit alongside HMO licensing rules. Mandatory licensing generally applies where a property is occupied by five or more people forming two or more households who share facilities, while councils can use additional licensing schemes to bring smaller HMOs within their licensing regimes.
Endacott says licensing plays an important role in ensuring properties meet appropriate standards.
He adds: “That matters because licensing exists for good reasons, covering fire safety, room sizes, and basic living standards.
“When people end up in accommodation that was never inspected or licensed, they lose access to all of those protections, often without even realising it.”
PRESSURE ON SHARED HOUSING
Demand for shared accommodation remains strong, particularly among students, younger renters and people unable to afford a property on their own.
Endacott warns that councils need to distinguish between tackling genuinely poor accommodation and restricting professionally managed HMOs that provide an important source of rental housing.
He says: “Councils are absolutely right to clamp down on poor-quality, overcrowded HMOs run by genuinely rogue landlords.
“But there’s a risk that blanket restrictions, particularly Article 4 directions covering entire towns or boroughs, end up filtering out well-managed shared housing alongside the bad, leaving tenants with fewer safe, legal choices rather than better ones.”
He adds: “Until local and national policy properly reconciles the demand for affordable shared housing with the drive to raise standards, we’re likely to keep seeing this tension play out.
“Renters deserve housing that is both affordable and safe, and right now, an awful lot of them are being asked to choose between the two.”
