Landlords with houses in multi-occupation (HMO) are selling up to avoid the new licensing arrangements introduced by the Government in April 2006, according to research published by the Royal Institution of Chartered Surveyors (RICS). Almost one third of letting agents report that landlords have sold their properties, while 15% report that landlords are changing the structure of their buildings.
In England, sales are most evident in the southern regions, with 24% of agents reporting landlords exiting the market in the Eastern region and London, while in the South East the figure was 22%. Of the 15% of agents reporting that landlords are changing existing properties to overcome rules on HMOs, many have reported landlords are no longer letting property to more than three tenants.
Students have been the most affected group, identified by 42% of agents in most regions of the country. However, in the Eastern region migrants were the hardest hit group. 21% of Chartered Surveyor letting agents have noted a reduction in the supply of affordable housing as landlords have exited the HMO sector. However, the impact on rental levels has been muted with 85% of agents reporting no change at all. The largest impact reported was in London, although rental rises have been moderate.
Jeremy Leaf, RICS spokesperson said: "The decrease in houses with multi-occupation will help to cut down on rogue landlords but will cause problems by reducing the number of properties available as landlords decide to withdraw from the sector, so creating an additional burden on the state to house the most vulnerable tenants. The student and immigrant population may be hit hard as accommodation becomes less accessible in university towns and urban areas. Rising fees and rising rents mean the days of 'Young Ones' style student housing could be over with more students opting to study near the parental home rather than follow the traditional route."
