New data from land and planning intelligence platform Searchland shows a national drop in the number of new HMO (House in Multiple Occupation) licences granted across Britain in 2024, with approvals down by 5.9% year-on-year. But a closer look reveals a more nuanced picture: while some local authorities have tightened their grip, others – particularly in high-demand urban areas – have seen HMO numbers rise sharply, opening the door for savvy landlords to meet growing tenant demand.
Searchland’s internal data reveals that 25,445 new HMO licences were approved by local planning authorities (LPAs) across Great Britain in 2023. In 2024, that number fell to 23,947 – a decrease of 1,498 licences. While this might appear to signal shrinking opportunities for landlords, it actually masks significant regional divergence.
Take Oxford, for example. The city saw 1,823 new licences granted in 2024 – a staggering increase of 1,341 from the previous year. Bristol wasn’t far behind, adding 838 more approvals than in 2023, while Lambeth, Hammersmith & Fulham, and Charnwood also posted gains of 759, 544, and 533 licences respectively.
“There’s been a decline in the annual number of HMO licences being granted by councils across Britain at a time when we arguably need more rental accommodation to ease the high demand from tenants,” said Hugh Gibbs, co-founder of Searchland.
Lambeth takes top spot for HMO growth
In 2024, Lambeth emerged as Britain’s top HMO licensing hotspot, accounting for 2,515 new licences – or over 10% of the national total. Oxford followed with 1,823 approvals, then Bristol with 1,588. Other strong performers included Haringey (1,158), Southwark (1,087), and Hammersmith & Fulham (1,007) – all granting over 1,000 new licences each.
What do these areas have in common? High tenant demand, large student populations, and an ongoing affordability crisis in the housing market – making HMOs an attractive option for renters and a necessary one for local councils trying to alleviate pressure.
“This reduction has no doubt been driven by a greater reluctance from councils due to a move towards risk-based licensing,” said Gibbs, adding: “Tighter regulations, particularly with regard to mandatory room sizes, may have also deterred investment.”
Tougher rules, but rising tenant need
Indeed, recent years have seen an uptick in regulation – from stricter fire safety requirements to minimum room sizes and energy efficiency standards. Many councils have introduced additional or selective licensing schemes on top of the mandatory framework, placing more red tape in landlords’ paths.
But while these measures might dissuade some, the fundamentals remain strong. Tenant demand is soaring – especially in cities where single lets are unaffordable or scarce – and the HMO model continues to offer superior yields for those willing to play by the rules.
Consider Sarah Jenkins, a landlord based in Bristol: “It’s tougher now – you’ve got to really understand your local licensing rules – but if you get it right, the demand is unbelievable. I’ve had houses let before they’re even advertised.”
In some cases, landlords are working with local authorities to ensure compliance and maintain supply. “We’re seeing more proactive landlords,” said Gibbs. “They’re asking the right questions, improving property standards, and providing exactly the type of accommodation local councils want to see.”
The national fall in new licences may seem insignificant at first glance, but it could lead to unintended consequences. As councils clamp down, landlords face rising compliance costs, and some exit the market altogether. With fewer new HMO licences being granted overall, tenants – especially young professionals and students – may be left scrambling for affordable shared housing.
