HMO Planning Refusals 2026: Why More Councils Are Rejecting Applications
HMO Planning Refusals in England
House in Multiple Occupation (HMO) planning applications are facing increasing scrutiny across parts of England, with new figures suggesting that councils are refusing significantly more applications than they did a few years ago.
In 2025, 144 English councils declined a combined 1,203 HMO planning applications, compared with 590 refusals recorded in 2021.
However, the figures need some context. The number of planning decisions also increased substantially, from 1,848 in 2021 to 3,454 in 2025 across the same group of councils. As a result, the proportion of applications refused did not double. Instead, the approval rate fell from 68.1% to 65.2%.
Even so, there were 613 more HMO refusals in 2025 than four years earlier.
The trend highlights a growing challenge for landlords, property investors and tenants as councils attempt to balance neighbourhood concerns with the continuing demand for affordable shared accommodation.
What Is an HMO?
A House in Multiple Occupation is generally a property occupied by people who are not members of the same household and who share facilities such as a kitchen or bathroom.
HMOs can sometimes attract negative attention because of concerns about:
- Noise and anti-social behaviour
- Waste management
- Parking pressure
- Overcrowding
- Changes to the character of residential streets
- Poor property management
These concerns can be legitimate. Poorly designed or badly managed HMOs should be subject to appropriate planning controls and enforcement.
However, not every HMO is poorly managed.
A well-designed and professionally operated HMO can provide safe and affordable accommodation for people who may not be able to afford an entire flat or house.
This includes students, young professionals, workers relocating for employment, couples experiencing financial difficulties and people trying to rebuild their finances.
For many tenants, the choice is not necessarily between an HMO and a one-bedroom flat. It may instead be between an HMO room, an expensive private rental, a long commute, staying with friends or relying on informal accommodation.
This is why restricting HMO supply does not necessarily eliminate the underlying demand for affordable housing.
Article 4 Directions Are Changing the HMO Market
Article 4 Directions are another important factor affecting HMO planning applications.
In areas without an Article 4 Direction, certain changes from a conventional C3 dwelling to a small C4 HMO can fall within permitted development rights, subject to the relevant planning rules.
Where an Article 4 Direction applies, those permitted development rights can be removed. A landlord may then need to submit a full planning application before converting a property into an HMO.
This can significantly change the investment calculation.
Some councils also use local planning policies or concentration thresholds designed to limit the number of HMOs within particular streets, neighbourhoods or defined areas.
As a result, a property that appears suitable for HMO conversion may still face significant planning restrictions.
A good-quality HMO could potentially be approved in one location while a similar proposal nearby is refused because the council considers that the concentration of HMOs has already reached an unacceptable level.
The challenge is ensuring that these restrictions address genuine local problems without unnecessarily reducing the supply of legitimate, professionally managed shared accommodation.
Landlords Must Carry Out Thorough Due Diligence
For landlords and property investors, planning due diligence has become increasingly important.
Buying a large property, calculating potential room rents and estimating renovation costs is not enough. Investors also need to establish whether the intended HMO use is legally permitted.
Before exchanging contracts, buyers should investigate:
- Whether the property is located within an Article 4 area
- Whether an Article 4 Direction has been proposed or recently introduced
- The council’s current HMO planning policies
- The property’s authorised planning use
- Any relevant planning history
- Whether an existing HMO has lawful planning status
- Whether additional licensing requirements apply
This is particularly important when purchasing a property that is already being marketed as an HMO.
An HMO Licence Does Not Automatically Prove Planning Permission
One of the most important points for HMO investors is the distinction between licensing and planning permission.
An HMO licence does not necessarily establish that the property’s use as an HMO has planning permission.
Similarly, council tax records, historic tenancy agreements or letting advertisements may not by themselves provide sufficient evidence of lawful planning use.
This can become particularly important when a landlord tries to sell or refinance the property.
A buyer’s solicitor or lender may require evidence that the HMO use is lawful. If the necessary documentation cannot be produced, the property’s value, mortgageability and future sale could potentially be affected.
A property that can demonstrate a legitimate history of HMO use may therefore be in a much stronger position than one where the planning status is uncertain.
Planning Restrictions Could Increase the Value of Existing Legal HMOs
Restrictions on new HMO developments can have wider consequences for the property market.
If councils make it harder to create additional HMOs, the supply of legally compliant shared accommodation may become more limited.
Where demand for affordable rooms remains high, existing HMOs with clear planning histories and proper licensing could become more attractive to investors.
However, scarcity only adds value when the property’s legal status can be demonstrated.
A properly licensed HMO with clear planning documentation, appropriate management records and evidence of lawful use can potentially be a valuable investment.
By contrast, purchasing a property based on assumptions about its HMO status could expose an investor to significant financial and legal risks.
This is why planning research should take place before agreeing on a purchase price rather than being left until the final stages of a transaction.
Say No to Bad HMOs, Not to Affordable Shared Housing
There is a strong case for councils to reject HMO applications that would create genuinely unsafe or unsuitable accommodation.
Properties with inadequate facilities, dangerous layouts, excessive overcrowding or unacceptable impacts on neighbours should be dealt with appropriately.
Rogue landlords and poorly managed properties should also face strong enforcement.
But the existence of badly managed HMOs does not necessarily mean that shared housing itself is the problem.
The UK continues to face significant pressure on affordable housing. Private rents remain challenging for many households, social housing waiting lists are substantial, and councils continue to deal with the cost and availability of temporary accommodation.
In this environment, professionally managed HMOs can form part of the wider housing solution by providing lower-cost accommodation for people who may otherwise struggle to find somewhere suitable to live.
The Bigger Housing Policy Question
The central issue is not whether every HMO should be approved. It is whether planning policy can effectively distinguish between harmful, poorly managed developments and good-quality shared accommodation that meets a genuine housing need.
Councils need effective tools to manage overcrowding, protect neighbourhoods and maintain appropriate housing standards.
At the same time, blanket or overly restrictive approaches could reduce the supply of affordable rooms and potentially increase pressure on other parts of the housing market.
The people who would have occupied a refused HMO still need somewhere to live.
Therefore, the long-term challenge is finding a balance between protecting local communities and ensuring that there is enough safe, legal and affordable accommodation.
What HMO Investors Should Do in 2026
Anyone considering purchasing or converting a property into an HMO should conduct detailed due diligence before committing to the investment.
Key steps include:
- Check whether an Article 4 Direction applies.
- Review the council’s current HMO planning policies.
- Investigate the property’s planning history.
- Confirm the lawful planning use.
- Check whether an HMO licence is required.
- Obtain appropriate professional legal and planning advice.
- Do not rely solely on the property’s existing rental history or marketing description.
- Confirm the property’s planning position before finalising the purchase.
The HMO market can still offer opportunities, but planning restrictions mean investors need to understand the rules before committing their money.
Conclusion
The rise in HMO planning refusals in England highlights the increasing tension between local planning controls and the demand for affordable housing.
Councils have a legitimate role in preventing unsafe developments, excessive concentrations and poorly managed properties. However, restricting HMOs does not remove the underlying need for affordable accommodation.
For landlords and investors, the message is clear: planning status, licensing and lawful use must be carefully investigated before purchasing an HMO property.
A compliant, well-managed HMO can be a valuable housing asset. An HMO purchased without proper due diligence can quickly become an expensive problem.
Disclaimer: Planning policies, Article 4 Directions, licensing requirements and local HMO rules vary between councils and can change over time. Property investors should obtain appropriate professional planning and legal advice before making investment decisions.
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