Renting Reforms Set to Increase Costs and Challenges for HMO Landlords

Summary: The upcoming Renters’ Rights Act, starting implementation on 1 May 2026, is expected to make Houses in Multiple Occupation (HMOs) more expensive to rent and harder to manage. Industry experts warn that the legislation’s focus on traditional single lets may inadvertently push tenants towards HMOs, increasing demand and rents, while also complicating eviction processes for landlords.

Introduction to the Renters’ Rights Act and Its Impact on HMOs

The Renters’ Rights Act, scheduled to begin its phased implementation on 1 May 2026, introduces significant changes to the private rented sector. While the legislation aims to enhance tenant protections, concerns have been raised about its unintended consequences for landlords and tenants involved with Houses in Multiple Occupation (HMOs).

Vann Vogstad, Founder and CEO of COHO, highlights that the Act largely overlooks the unique nature of HMOs. He suggests that as the legislation makes traditional single lets less attractive to landlords, more tenants will be pushed towards shared living arrangements, increasing demand and rental costs for HMOs.

Shift from Single Lets to Shared Living

According to Vogstad, the Act’s provisions will discourage landlords from maintaining single-let properties, thereby accelerating the shift towards shared living. He explains, “The Renters’ Rights Act will make single lets far less appealing, pushing more landlords towards shared living.”

He emphasises that successful HMO management depends on fostering compatibility and community among tenants, a factor often underestimated in legislative frameworks. This shift could lead to a rise in rents as HMOs become more popular, placing additional financial pressure on tenants seeking affordable housing.

Eviction Challenges and the Abolition of Section 21

One of the most contentious changes in the Act is the abolition of Section 21 ‘no-fault’ evictions. Vogstad warns that this will disproportionately affect HMO landlords, as Section 21 has traditionally been a crucial tool for swiftly removing problematic tenants in shared living situations.

He states, “It’s called a ‘no-fault’ eviction but it’s how landlords discreetly and quickly remove people who make others feel unsafe.” Without this mechanism, landlords must rely on Section 8, a more protracted legal process that can take six months or longer. This delay forces victims to continue living alongside individuals who may be threatening or harassing them, undermining tenant safety.

Vogstad criticises the lack of improvements to Section 8 within the Act, noting that shared living arrangements have again been neglected in the legislative process. The result, he argues, is a policy that grants new rights to some tenants while effectively removing others’ right to feel safe in their homes.

Implications for Student HMOs

Vogstad also highlights specific challenges for student HMOs. Previously, when a student left a shared tenancy, the remaining tenants typically had the opportunity to find a suitable replacement, often a friend, maintaining the household’s cohesion and stability.

Under the new rules, the departure of one tenant ends the entire tenancy, requiring landlords to find a replacement tenant mid-term, often without regard to compatibility. This change reduces tenant choice, destabilises tenancies, and risks turning homes into “houses of strangers,” further complicating management for landlords.

Conclusion and Considerations for Landlords

The Renters’ Rights Act introduces important tenant protections but also presents significant challenges for landlords, particularly those managing HMOs. The shift away from single lets towards shared living could increase demand and rents for HMOs, while the removal of Section 21 evictions complicates the management of problematic tenants.

Landlords should prepare for these changes by reviewing their tenancy management strategies, ensuring compliance with new regulations, and considering the implications for tenant safety and community within their properties.

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• Renters’ Rights Act 2026
• HMO rental costs
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• Section 21 eviction abolition
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The Renters’ Rights Act, starting May 2026, is set to increase rents and management challenges for HMOs as landlords shift away from single lets. Discover the implications for landlords and tenants in shared living.

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Renters’ Rights Act to Raise HMO Costs and Complicate Management for Landlords