England's Houses in Multiple Occupation (HMO) sector has expanded by 2.3% over the past year, adding nearly 10,500 properties to reach a total of 472,823, research reveals.
However, according to COHO, an HMO management platform, the modest national increase is hiding huge regional variations.
It says that some areas have experienced rapid growth while others have seen sharp declines. The West Midlands stands out with an 8.8% rise in HMO properties, followed by London at 5.4% and the North East at 3.2%.
HMOs have a vital role
The firm's founder and chief executive, Vann Vogstad, said: "While it's encouraging to see overall growth in the HMO sector, the stark regional disparities raise important questions about access, policy and perception.
"HMOs play a vital role in the UK housing market, not only do they offer more affordable living options at a time when housing costs are spiralling, but they also create a sense of community and shared living that can help tackle the growing crisis of social isolation and poor mental health."
He added: "We are at a time when the need for good quality, affordable, and well-managed shared housing has never been greater.
"But the growth in some areas and the sharp declines in others suggest that local attitudes, licensing regimes, and planning decisions are creating an uneven playing field."
Some areas saw HMO numbers fall
Despite HMO numbers rising in some areas, the East of England saw a 4% drop, and the South East recorded a 3.3% fall.
Local authority data paints an even more varied picture.
COHO says that East Devon leads with a remarkable 523% surge in HMOs, joined by Wandsworth (381.6%), South Staffordshire (300%), Wolverhampton (233.3%) and Medway (190.1%) as areas where HMO numbers have more than doubled.
It adds that these regions appear to prioritise expanding quality housing options for their communities.
Big drops in HMOs
However, the data also shows that some areas have seen dramatic reductions.
Welwyn Hatfield reported a 72.5% plunge in HMO properties, with Watford close behind at 65.6%.
Big declines in numbers also occurred in Walsall and Sefton (both 50%), Reading (37.6%), North Tyneside (37.1%) and Stevenage (36.7%).
This uneven landscape reflects differing local demand, planning policies and licensing requirements, the platform said.
Regulation discourages HMO supply
Mr Vogstad said: "In too many places, regulation appears to be discouraging supply rather than improving standards.
"There's also a wider concern around how the sector is being portrayed.
"The rise in stigma linked to recent political rhetoric around migrant housing and changing neighbourhoods risks further undermining public understanding of HMOs and their value.
"If we allow fear and misinformation to shape housing policy, we'll end up penalising the very model that helps many people find stable, sociable and affordable places to live."
He adds: "This is bad for tenants, bad for communities, and bad for the nation's economy.
"We need to see more support for responsible HMO development across all regions, not just for investors, but for the people who rely on this form of housing to get by.
"Without that, the imbalance we're seeing today may only deepen, and that's a risk the country can't afford to take."
HMO challenges for student landlords
The managing director of Accommodation for Students, Simon Thompson, said: "For some student landlords, the HMO market's uneven growth presents both opportunities and challenges.
"In areas like East Devon and Wolverhampton, with booming HMO numbers, could signal strong demand from students seeking affordable, shared housing.
"However, declining markets like Welwyn Hatfield and Watford suggest caution, as local regulations and stigma may hinder investment."
He added: "It is a worry that council regulation is leading to such big drops in HMO numbers as landlords decide not to invest and that, of course, means fewer affordable homes for people in those areas."
