HMO Applications Up 40% — But 70% Get Refused in Blackpool

The Headline Everyone Is Running — And What It Leaves Out

The 40% rise in HMO applications since 2018 is a real number. It comes from a Freedom of Information study conducted by specialist landlord insurer Just Landlords, who sent requests to more than 300 local authorities across Britain. Annual applications climbed from 41,162 in 2018 to 57,725 in 2024, according to data reported by [propertywire.com](https://www.propertywire.com/news/uk/hmo-licence-applications-rise-40-since-2018/) and [mpamag.com](https://www.mpamag.com/uk/mortgage-types/buy-to-let/hmo-licence-applications-climb-40-since-2018/571055).

Every property title ran with that figure. Fair enough — it is a significant shift.

But the national aggregate is almost useless for an investor deciding where to put money. What matters is what happens after you submit the application. And that data tells a completely different story.

Where the Applications Are Coming From: The Regional Breakdown

Edinburgh leads the entire country with an average of 5,158 HMO applications per year — nearly double Oxford in second place at 2,458. Bristol sits third at 1,491, followed by Southwark at 1,412 and Tower Hamlets at 1,394, per the Just Landlords FOI data.

Those top five make intuitive sense. University cities and inner-London boroughs have always driven shared housing demand. Students, young professionals priced out of self-contained flats, key workers — the demand pool is deep and relatively stable.

The more interesting signal is in the growth rates. Sandwell in the West Midlands recorded a 964% increase in applications between 2018 and 2024 — from just 28 applications to 298. West Lancashire grew 886%. Tower Hamlets 750%. Guildford 742%. Waltham Forest 481%. These figures come directly from the [dailymail.co.uk](https://baucishotel.com/money/mortgageshome/article-15715373/HMO-applications-surge-nearly-1-000-six-years-parts-Britain.html) coverage of the Just Landlords research.

What this tells me is that capital has been moving. Investors who got priced out of Edinburgh and Oxford have been hunting yield in the Midlands and the North, where entry prices are lower and the rental yield arithmetic still works. That migration of investment is now showing up in the application data.

Clark Ross, Managing Director at Just Landlords, described it as a "major evolution" — noting that the Midlands and North are now seeing application growth of nearly 1,000% in some areas. That is not a rounding error. That is a structural shift.

The Refusal Rates Nobody Puts in the Headline

Here is where the story gets genuinely useful — and genuinely uncomfortable for investors who did not do their local research.

Blackpool refused 70% of HMO applications between 2018 and 2024. Seventy percent. Fenland refused 51%. Sandwell — the same authority that saw 964% application growth — refused 48% of them.

Think about that for a second. Sandwell is simultaneously one of the fastest-growing HMO markets in the country and one of the highest-refusal councils. Investors piled in chasing the yield story, and nearly half of them hit a wall.

Armagh sits at 26% refusals. Norwich at 24%. These are not fringe cases — they represent a pattern of local authority resistance that the national 40% growth headline completely obscures.

On enforcement, the picture is equally uneven. Lewisham averaged 288 enforcement actions per year, Wandsworth 146, Liverpool and Denbighshire both at 141, Camden at 117. Council inspections across Britain rose 83% since 2018. Enforcement actions — improvement notices, prosecutions — rose 180%, according to the Just Landlords data reported by [propertysoup.co.uk](https://propertysoup.co.uk/hmo-boom-gathers-pace-as-landlords-chase-yield/).

Ross frames the tightening regulation as a positive: higher standards protect the sector's reputation and prevent professional landlords from being undercut by sub-standard operators. I agree with that in principle. But the practical implication for investors is stark — entering a high-refusal or high-enforcement council area without local intelligence is an expensive mistake waiting to happen.

How to Actually Use This Data Before You Buy

The FOI data gives you a starting framework. But it is a lagging indicator — it covers 2018 to 2024. Councils change their policies. New selective licensing schemes get introduced. Article 4 directions get extended. What was a smooth-approval council in 2022 may have tightened significantly by the time you read this.

So here is how I think about pre-acquisition due diligence on HMO licensing:

First, go directly to the council's planning portal and look at recent HMO application decisions — not just the approval rate, but the reasons for refusal. Overcrowding concerns? Parking? Amenity space? Each refusal reason tells you what the council is actually sensitive to, which tells you what a successful application needs to address.

Second, check whether the area operates under an Article 4 direction, which removes permitted development rights for HMO conversions and requires full planning permission. Camden, for example, operates a borough-wide additional licensing scheme on top of mandatory licensing. That adds cost and time.

Third, speak to a local planning consultant who has submitted HMO applications in that specific council area within the last 12 months. Not a national firm. Local. Someone who knows the planning officers by name and understands what the committee is currently prioritising. This single step saves more money than almost any other piece of due diligence I can point to.

Fourth — and this is where most investors skip a step — model the worst case. If your application is refused, what is the asset worth as a standard buy-to-let? If the answer is "not much," your risk profile just changed significantly. Consider consulting a qualified financial adviser or IFA before committing capital to any specific strategy.

The HMO market is maturing. The days of buying any terraced house in a student area and assuming the licence will follow are over. The councils with high refusal rates are telling you something — listen to them before you exchange, not after.

Where the Smart Money Is Actually Looking Right Now

Based on the Just Landlords data, the areas showing the strongest combination of application volume and — presumably — reasonable approval rates are the established university cities: Edinburgh, Oxford, Bristol. High demand, deep tenant pools, relatively mature regulatory frameworks.

But for investors who cannot access those markets at viable entry prices, the growth corridors are worth watching carefully. West Lancashire's 886% growth did not happen by accident — it reflects genuine demand from renters priced out of Manchester. Tower Hamlets at 750% reflects the same dynamic relative to central London.

Guildford at 742% is interesting. Commuter belt, strong professional tenant demand, and historically lower HMO saturation than inner London. Worth understanding the local council's current stance before assuming the growth trend continues.

The areas I would approach with serious caution: Blackpool and Fenland, for obvious reasons. A 70% refusal rate is not a policy quirk — it is a statement of intent from the local authority. You can fight it with a strong application, but you need to go in knowing the odds are stacked against you and budget accordingly for the possibility of refusal, appeal, and delay.

Sandwell is the most complex case. The growth is real, the demand is real, but the 48% refusal rate means you need to be very specific about which properties and which sub-areas within the borough are likely to succeed. A blanket "Sandwell is growing, buy there" thesis is not enough.

The [propertyportfolioinvestor.co.uk](https://propertyportfolioinvestor.co.uk/investment-insights/hmo-applications-surge-40-percent-landlords-shared-housing/) analysis put it well: the HMO sector is no longer a fringe corner of the rental market but a maturing, professionalised segment. That professionalisation cuts both ways — better returns for those who do it properly, steeper consequences for those who don't.

The 40% national growth figure is real, but it is the wrong number to base an investment decision on. The right numbers are the refusal rate and enforcement frequency in the specific council area you are targeting — and those vary from 0% to 70% depending on where you look. The investors who will build durable HMO portfolios over the next five years are not the ones chasing the headline. They are the ones who pulled the FOI data, called the local planning consultant, and stress-tested the downside before they made an offer. The data is now public. The question is whether you use it.