England HMO market falls by 21,000 in two years

  • 02/02/2023
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England HMO market falls by 21,000 in two years
The number of houses in multiple occupation (HMOs) shrunk by around 2.4 per cent annually in 2022 to 489,701, continuing a trend seen over the past few years.

According to analysis from Octane Capital, this means that England’s HMO market has decreased by around 21,000 properties over the past two years.

Figures show that in 2019/2020 there were 510,776 HMOs, which fell to 501,992 in 2020/2021.

The East Midlands had the largest reduction with HMO stock levels down by 26.1 per cent in a year to 21,752.

This was followed by the North East with a 15.8 per cent drop year-on-year to 17,378 HMO properties in 2021/2022 and South East with a decrease of 6.7 per cent over the same period to 69,102.

The number of HMOs grew year-on-year in the West Midlands by 16.9 per cent to 44,366.

Yorkshire and the Humber reported the second strongest growth at 11.2 per cent, bringing the number of HMOs to 54,527 in 2021/2022.

South West came third in the growth stakes at 0.6 per cent annually to 49,879 in 2021/2022.

London has the greatest proportion of HMOs at 145,615, or around 29.7 per cent of all HMOs. This is despite a 5.2 per cent fall.

South East accounted for 14.1 per cent of HMOs and Yorkshire and the Humber make up 11.1 per cent of all HMOs.

The North East had the lowest proportion at 3.5 per cent, followed by the East Midlands at 4.4 per cent and East of England at 7.6 per cent.

Octane Capital’s CEO Jonathan Samuels said: “HMO stock levels have continued to slide since the introduction of tighter licensing rules by the government at the back end of 2018 and there are now some 21,000 less HMOs available across England than there were just two years ago.

“While any attempts to raise living standards for the nation’s tenants should be welcomed, it’s imperative that we also incentivise investors to remain within the sector. “

He continued: Failing to do so will only see the level of available rental properties continue to fall, driving the cost of renting ever higher in the process, at the expense of the nation’s renters.”

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