HMO Planning Refusals 2026: Why More Councils Are Rejecting Shared Housing Applications
HMO Planning Refusals Are Rising Across England
The number of HMO planning applications being refused by councils in England has increased significantly in recent years, raising fresh questions about the future of shared housing and the availability of affordable accommodation.
In 2025, councils across 144 English authorities rejected 1,203 HMO planning applications, compared with 590 in 2021.
However, the figures need some context. During the same period, the total number of decisions on HMO applications increased substantially, from 1,848 to 3,454.
That means councils have not suddenly become twice as likely to reject HMO proposals. The approval rate fell from 68.1% in 2021 to 65.2% in 2025.
Nevertheless, the number of outright refusals increased by 613 in just four years.
For landlords, investors and people searching for affordable accommodation, that increase matters.
HMOs Are More Than Just Houses With Extra Rooms
The term HMO can sometimes trigger concerns about overcrowding, noise, parking, rubbish and pressure on local services.
Some of those concerns are legitimate.
Poorly designed or badly managed HMOs can create serious problems for residents and neighbouring communities. Unsafe layouts, inadequate facilities, excessive occupancy and irresponsible landlords should not be tolerated.
But shared housing itself is not necessarily the problem.
A well-designed and professionally managed HMO can provide good-quality accommodation for people who may not be able to afford an entire flat or house.
That includes students, young professionals, key workers, people relocating for employment, separated couples and individuals rebuilding their finances.
For many tenants, the choice is not between an HMO and a spacious one-bedroom flat.
It may be between an HMO room, an unaffordable private rental, a long commute, staying with friends or family, or an unsuitable informal arrangement.
Councils can refuse planning applications, but they cannot remove the underlying demand for affordable housing.
How Article 4 Directions Affect HMO Development
In many parts of England, permitted development rights can allow a conventional C3 residential property to be converted into a smaller C4 HMO for between three and six unrelated occupants, subject to the applicable rules.
However, an Article 4 Direction can remove those permitted development rights in a particular area.
When that happens, landlords generally need to submit a full planning application before changing the property’s use.
This gives councils greater control over the concentration and distribution of HMOs within their communities.
The intention can be reasonable: councils may want to prevent excessive concentrations of shared housing and protect neighbourhood character.
The difficulty arises when broad restrictions make it unnecessarily difficult to provide good-quality shared accommodation even where there is clear demand.
Some councils apply concentration policies or percentage-based thresholds. This can mean that a professionally designed HMO may be refused simply because the surrounding area is considered to have reached a particular level of HMO provision.
Yet the people who would have rented those rooms still need somewhere to live.
That is the central challenge for policymakers.
Planning Restrictions Can Affect Housing Supply
Article 4 Directions are intended to help councils respond to local housing and community concerns.
But applying restrictions across large areas can have consequences beyond the streets where problems are concentrated.
If the issue is primarily associated with a handful of streets, a blanket approach across an entire town or borough may reduce the supply of shared accommodation far beyond the areas experiencing the greatest pressure.
That can contribute to scarcity and potentially push up rents for existing rooms.
A more targeted approach could allow councils to tackle poorly managed or excessive concentrations of HMOs while continuing to support suitable new accommodation elsewhere.
Good housing policy should address the problem without unnecessarily restricting the supply of housing that people genuinely need.
Landlords Need to Carry Out Planning Due Diligence Before Buying
For property investors, the changing planning environment makes due diligence more important than ever.
A landlord should not simply identify a large property, calculate potential room rents and assume the HMO model will work.
Before exchanging contracts, buyers should establish:
- Whether the property is located within an Article 4 area
- Whether an Article 4 Direction has been proposed or is due to take effect
- The council’s current HMO planning policies
- The property’s existing lawful planning use
- Whether the proposed HMO conversion would require planning permission
- Whether the property has an established planning history relating to HMO use
- Whether its licensing position is separate from its planning status
This distinction is particularly important when purchasing an existing HMO.
An HMO licence does not automatically prove that the property has lawful planning permission for HMO use.
Likewise, the fact that tenants have occupied a property for several years does not necessarily establish its lawful planning status.
This can become particularly important when the property is sold or refinanced.
A buyer’s solicitor and mortgage lender may require evidence that the HMO use is lawful. Council tax records, historical letting advertisements or an HMO licence may not, by themselves, provide sufficient certainty.
A property that can demonstrate lawful HMO use established before an Article 4 Direction took effect may therefore be in a significantly stronger position than one where the owner is seeking permission for a new HMO conversion.
Planning Status Can Affect an HMO’s Value
Restrictions on new HMO development can have wider consequences for property values.
When councils limit the creation of new HMOs, existing properties with clear and lawful HMO status may become more attractive because competing supply is harder to create.
An established HMO with a clear planning history, appropriate licensing, good management records and evidence of lawful continued use can therefore become a valuable investment asset.
But investors should be careful not to confuse scarcity with security.
A property that appears to be an established HMO but has unclear planning status could create significant problems for the owner.
That is why planning due diligence should happen before the purchase price is agreed — not simply at the final stage of the transaction.
The planning position can directly affect the property’s rental potential, investment value, mortgageability and future saleability.
The Goal Should Be Better HMOs, Not Fewer HMOs at Any Cost
There is a strong case for councils taking action against unsafe, overcrowded and poorly managed HMOs.
Properties that fail to meet safety standards or cause serious and demonstrable harm to neighbouring communities should face enforcement.
Rogue landlords should also be dealt with firmly.
But shared housing should not automatically be treated as the problem.
The UK continues to face significant affordability pressures. Private rents are beyond the reach of many households, social housing supply remains under pressure and councils continue to deal with demand for temporary accommodation.
In that environment, well-managed HMOs can form an important part of the housing supply.
The challenge is finding the right balance.
Councils should prevent harmful and inappropriate developments while allowing suitable, professionally managed shared accommodation to meet genuine housing demand.
Refusing an HMO application may stop one property from becoming shared accommodation, but it does not eliminate the person who needed that room.
The better approach is simple: reject bad HMOs, enforce against rogue landlords and protect communities — while making room for good-quality shared housing that provides people with a safe and affordable place to live.
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