Market showing continued strength despite regulatory change
Oxford and Cambridge top the table for the largest share of HMOs outside of London, according to analysis by Property Buyers Today.
It showed that Oxford has 2,664 small and large HMOs, a 4.52% share of the total number of houses in the city. Oxford has an average house price of around £475,000 (one of the most expensive outside of London), and a monthly rent of up to £1,958. Cambridge, meanwhile, has 2,243 HMOs, a 3.98% share.
Bristol, in fourth place, has a larger number of HMO properties, at 6,904. However, out of a total of 202,815 houses, that figure marks a 3.4% share of the market.
Saif Derzi, founder of Property Buyers Today, said that new licensing rules, alongside the introduction of the Renters’ Rights Act, were changing the market.
A noticeable shift
“There’s been a noticeable shift in landlord sentiment over the last 12 months, with landlords selling off at least 2,000 student accommodation beds across the UK in that time, ahead of the introduction of the Renters’ Rights Act,” said Derzi.
“Whilst some have opted to sell, the new licensing rules could in part benefit non-casual landlords by eliminating sub-standard competitors, stabilising tenant demand for high-quality properties, and driving up rental yields for professional operators, due to the overall supply of compliant rooms shrinking due to the new regulation.
“For professional HMO operators, who already consider licensing, fire safety, room size, tenant suitability, rent collection, maintenance, complaints handling, deposit protection, tenancy documentation, rent review evidence, and the overall condition of the property, the new Renters’ Rights Act is arguably the direction the market should be moving in.
“In short, the Renters’ Rights Act has signalled a shift towards higher industry standards rather than the end of HMO investment. It has changed the rules of participation and standards. HMOs will continue to serve a clear need in the rental market. The new shift is arguably a positive that protects both tenants and landlords by weeding out those particular individuals just there for investment purposes, rather than a service that provides fair, flexible housing.”
The UK regions with the largest share of HMOs outside of London:
| Rank | Local authorities | Number of Small and Large HMOs | Total Number of Houses | Percentage of Houses that are HMOs |
| 1 | Oxford | 2,664 | 58,980 | 4.52% |
| 2 | Cambridge | 2,243 | 56,411 | 3.98% |
| 3 | Exeter | 2,000 | 55,627 | 3.60% |
| 4 | Bristol | 6,904 | 202,815 | 3.40% |
| 5 | Nottingham | 4,151 | 134,409 | 3.09% |
| 6 | Norwich | 2,026 | 67,624 | 3.00% |
| 7 | Brighton and Hove | 3,843 | 130,838 | 2.94% |
| 8 | Newcastle upon Tyne | 3,677 | 129,553 | 2.84% |
| 9 | Lincoln | 1,197 | 45,116 | 2.65% |
| 10 | Bath and North East Somerset | 2,075 | 84,109 | 2.47% |
