The expansion of stricter planning regulations is making it increasingly difficult to develop and maintain Houses in Multiple Occupation, which serve as a vital source of affordable housing for numerous individuals.
Industry observers have raised concerns that these constraints could reduce the availability of legitimate shared accommodation options.
Property specialists have noted that the issue extends beyond conflicts between property owners and local authorities.
According to Paul Endacott of 1st Avenue, when licensable HMOs are refused planning permission or have licence applications rejected, the underlying demand for affordable rooms in shared properties does not disappear.
Instead, this need redirects toward less regulated alternatives.
Harrow has become one of several councils to implement a borough-wide Article 4 direction, mandating formal planning approval before family residences can be converted into small HMOs accommodating between three and six unrelated occupants.
Neighbouring Hillingdon has similarly broadened its HMO regulatory framework across the entire borough.
Research examining 144 local authorities across England has revealed a substantial rise in HMO planning submissions.
Applications increased by 87 percent between 2021 and 2025, climbing from 1,848 to 3,454.
The number of refusals more than doubled during the same timeframe, rising from 590 to 1,203.
While approval rates held steady at approximately 68 percent from 2021 to 2023, this figure fell to 63 percent in early 2026.
Within the capital, Article 4 directions have altered the landscape for small HMO conversions.
Properties that would previously have proceeded without planning consent now require full application consideration, enabling local authorities to evaluate proposals against policies addressing housing mix, neighbourhood character, and concentrations of shared accommodation.
Endacott observed that these regulatory tightening measures can inadvertently push some operators toward smaller properties or informal arrangements that fall outside standard council inspection procedures.
The uncomfortable reality is that displaced demand often gravitates toward arrangements that are less visible and potentially less secure.
Planning controls operate alongside an enhanced licensing regime designed to elevate safety and quality standards.
The Housing Act 2004 mandates that landlords accommodating five or more individuals from two or more households who share facilities must possess a valid HMO licence.
Operating without appropriate licensing constitutes a criminal offence, potentially resulting in civil penalties reaching £30,000 per violation, rent repayment orders covering up to twelve months’ rental income, criminal prosecution, and inclusion on the database of rogue landlords and agents.
Certain councils have extended licensing requirements to encompass smaller HMOs.
The significance of licensing requirements relates to the protections they provide regarding fire safety provisions, minimum room dimensions, and baseline living conditions.
When individuals occupy accommodation that has never undergone inspection or licensing, they forfeit access to these safeguards, frequently without awareness of their absence.
London, where rental costs remain the highest nationally, relies heavily on HMOs as the sole affordable housing pathway for students, young professionals, and lower-income workers.
The impending Renters’ Rights Act, which will eliminate fixed-term tenancies and Section 21 no-fault eviction notices upon implementation, may render HMOs comparatively more appealing to certain property owners relative to single-occupancy lettings.
Harrow’s approach illustrates the complex balancing act confronting local authorities.
Its supporting evidence acknowledges the contribution HMOs make toward meeting housing requirements while simultaneously identifying concerns regarding over-concentration and effects on residential neighbourhoods.
Housing sector organisations have cautioned that constraining legitimate HMO supply without addressing underlying demand could channel individuals toward less visible arrangements.
The National Residential Landlords Association has previously maintained that Article 4 restrictions can disproportionately impact students and younger residents.
Endacott acknowledged that councils are entirely justified in tackling substandard, overcrowded HMOs operated by unscrupulous landlords.
However, there exists a risk that sweeping restrictions, particularly Article 4 directions covering entire towns or boroughs, may inadvertently eliminate well-managed shared housing alongside problematic operators, ultimately leaving tenants with diminished access to safe, legal accommodation rather than improved alternatives.