When David Ormston discovered the house next door was being converted from a three-bedroom family home into a property that would house six unrelated tenants, he feared it would be trouble.
But he didn’t realise just how much this band of new neighbours would come to cost his family.
David, 72, and his wife Diane, 80, have lived on the quiet street in Sutton, Surrey, for 43 years and planned to downsize in the next few years to free up cash to see them through retirement.
To their horror, the couple have found that around £25,000 has been wiped from the value of their home since the house next door was turned into a house share – officially known as a house in multiple occupation (HMO).
A valuation by two different estate agents before and after the terraced home next door was converted into a house share found the value of the property had fallen from £550,000 to £525,000 as a direct consequence, he says. ‘I hit the roof. I was fearful I could be living beside people with no respect for the area, the house or the people next door.’
An HMO is a property rented by at least three people who are not from the same household but share facilities such as a kitchen or bathroom.
There were an estimated 472,823 HMOs in the UK in 2025, as growing numbers of homeowners have made applications.
There was a 40 per cent surge in the number of applications to convert homes into HMOs between 2018 and 2024, according to official data.
A growing number of homeowners have made applications for homes to be converted into HMOs
Many cause no problems for their neighbours while providing much-needed accommodation for people who cannot afford to rent an entire property. The set up can be a lifeline for squeezed landlords who have struggled to stay in the black following a barrage of red tape and taxes from the Government. That’s because a property can typically yield a higher rent when let to multiple tenants as an HMO than to a single household.
But these homes can sometimes raise issues for local residents and have attracted a reputation for creating noise, mess and anti-social behaviour. More people living in one property can mean additional cars have to compete for limited on-street parking, while additional occupants can put pressure on bin storage and waste collection.
In recent weeks, Money Mail has received dozens of letters from readers who say they have been subjected to ongoing torment from HMO neighbours. Some report cases where neighbours host loud late night parties while others say they have had to deal with smoking and public urination.
One reader says she’s united with neighbours on her street to stop HMOs being developed in their area and have collectively paid more than £5,000 in legal fees in their attempt.
In David’s case, he says his new neighbours have been perfectly respectful. However, that won’t stop his house being priced for far less than it otherwise would have been. The retired construction manager says it all started when his neighbour died in September 2023 and the property was auctioned off. Building work started in January 2024 and lasted six months while a loft conversion and a rear extension were completed.
One month after the building work started, David received an email from the council to say the three-bed terrace next door was to become a six-bed HMO.
Larger HMOs – those housing five or more people from two or more households – are subject to mandatory licensing in England.
David says he tried to appeal the licence but lost. He says: ‘It made us feel totally powerless to do anything. It was really upsetting.’
Since February 2025, Sutton Council has changed the rules and now requires landlords to get full planning permission for certain changes of use, including converting a single-family home into an HMO. But this wasn’t previously the case when the home next to David was converted.
This change is known as an Article 4 direction which allows councils to remove certain permitted development rights, meaning landlords may need planning permission to convert a family home into a small HMO.
Councils across England have introduced these directions since 2010 but they are not in place everywhere and can cover only specific neighbourhoods.
To check whether your area is covered, visit your local council’s planning website or PlanWatch’s guide at planwatch.co.uk.
In March 2024, David attended a council meeting where he planned to ask why he hadn’t received a consultation, inspection or seen any building control.
He says the condition of the property’s garden has also become a major concern. ‘It’s totally overgrown and attracts many unwelcome guests, including rats, foxes and mice,’ he says.
James Nightingall of HomeFinder AI says: ‘Concerns about noise, parking or poor management can make neighbouring properties less appealing to some buyers’
However, it’s the ‘financial hit’ and ‘basic lack of consideration’ that irks David the most.
He and his wife hoped to sell their property and use the money to top up their pensions.
He says: ‘We’re not rich people. Why should I, a pensioner, take a £25,000 hit on the price of my house? Especially when this has absolutely nothing to do with me.’
James Nightingall of property search service HomeFinder AI, says: ‘Concerns about noise, parking or poor management can make neighbouring properties less appealing to some buyers.
‘However, an HMO does not automatically reduce nearby property values and I would be cautious about attributing any fall entirely to it without examining comparable sales, the property’s condition and the wider market.’
6 toilets put in next door
Anne Healion, 59, who lives in a two-bed terraced house in Gravesend, Kent, has been fighting to stop the home next door from being turned into an HMO.
Anne, who lives in a close-knit community on a quiet street, was confused when she answered her front door on July 8 and found a bricklayer who spoke no English holding up a screen.
She says he held out a message on his iPad which said he would be adding a rear extension and loft conversion to the house next door, with all work completed in two months.
Unknown to Anne, the workers would be installing six showers and toilets in the two-bed terraced home next door that is identical to her own. ‘I was shocked. This is a really quiet road. We have street parties and everybody kind of knows each other. I’m just so worried about at least six unrelated people moving in.’
Anne claims that during construction, the builders trespassed on her garden to build the rear extension and even removed a boundary fence. It was only when questioning one of the builders that she found out the property was being converted into an HMO. She said: ‘This has really affected me. We’re thinking of moving.’
Anne contacted Gravesham Borough Council about her concerns, fearful of the size of the rear extension and that building regulations had not been carried out. No action was taken, she claims.
In August, planning officers from the council visited the property and confirmed planning permission and an HMO licence were required, she says.
However, no HMO or planning applications have been submitted at this address yet.
A Gravesham council spokesman said: ‘Our planning enforcement team has followed up on local concerns over work taking place and following a site visit did update the local resident who raised those.
‘The owner of the property where the work has been taking place has been informed that planning permission is required for a rear extension and enforcement officers continue to monitor the site while we await receipt of an expected application.
‘We have not received a licence application for this address but we do ask landlords to submit applications only once a property is entirely ready to let so that any inspection can accurately review all elements that are required for a licence to be granted.’
Anne Healion has been fighting to stop the home next door from being turned into an HMO
Can you object to an HMO?
So what can homeowners do if they believe an HMO is being set up and they fear it will have a negative impact on their street? Is there a point at which it becomes too late to object?
We put these questions to Money Mail’s consumer lawyer Dean Dunham KC, who explained what residents can do when a conversion has already taken place and where councils have a duty to act.
Where a property has already been turned into an HMO and been rented out this way for some time, as was the case for David, there is little that homeowners can do, Dunham says.
Using David’s situation as an example, he says: ‘The conversion happened about three years ago and at that point a property could be converted to a small HMO for up to six people using nationally set permitted development rights.
‘In other words, no planning application was needed, so there was nothing to consult on.
‘Rear extensions and loft conversions can often go ahead under permitted development too. Sutton has since tightened the rules: its borough-wide Article 4 Direction came into force on February 22, 2025 but it doesn’t apply retrospectively.’
That said, just because something is permitted, it doesn’t mean it’s unregulated, Dunham says. Anyone in this position still has a few tricks up their sleeve.
He says: ‘Any HMO with five or more occupants from two or more households needs a mandatory licence from the council.
‘This reader can ask Sutton’s private housing team whether the property is licensed. Licence conditions often cover waste and the upkeep of the property.’
The next point to check is building control. The extension and loft conversion would still have needed building regulations approval.
Dunham says that homeowners can ask the council’s building control team for information on this or search records for completion certificates. If they don’t exist, the property can be reported.
Third on the checklist is the garden, Dunham says. ‘The council has a duty under the Prevention of Damage by Pests Act 1949 to deal with rat infestations and can serve notice on the owner. It can also issue a Section 215 notice requiring untidy land to be cleared.’
In David’s case, he should make a complaint in writing, citing these powers, and include photos. Next, consider escalating the issue. Housing and planning sit with the Ministry of Housing, Communities and Local Government.
If the council still refuses to act, homeowners can use its formal complaints process and then go to the Local Government and Social Care Ombudsman for free.
As for the fall in David’s house price, there’s very little that can be done. Dunham says: ‘Sadly, there is no compensation for a fall in value caused by a lawful neighbouring use.
‘He could ask the Valuation Office Agency whether a change in the locality justifies reviewing his council tax band but I understand this is rarely successful.’
Even if a property has already been renovated or converted and hasn’t yet been let out as an HMO, homeowners may have more opportunity to object.
Dunham says: ‘The first and most important point is that completing building work confers no immunity whatsoever.
‘A common misconception is that once the conversion is done, the battle is lost. It isn’t. If work has been carried out without the required planning permission, the council’s enforcement powers are not defeated by the fact the building now stands.’
Pointing to Anne’s case, he says: ‘The owner here has already been told the extension exceeded permitted development and instructed to submit a retrospective planning application, yet none has materialised.’
Dean Dunham KC, Money Mail’s consumer lawyer, says: ‘A common misconception is that once the conversion is done, the battle is lost. It isn’t’
That inaction is itself significant, he adds, and in this case Anne should keep pressing the council to pursue it.
‘On the planning route, her realistic options are these.
‘Where a retrospective application is eventually submitted, she has the right to object during the public consultation period, and neighbours’ representations on matters such as overdevelopment, loss of privacy and parking are valid planning considerations the authority must weigh.
‘If no application is forthcoming, she should push the planning enforcement team to issue an enforcement notice requiring the unlawful works to be regularised or undone.
‘Councils have discretion here, so sustained, documented pressure matters. Importantly, there is no third party right to appeal a permission once granted, so, the time to influence it is during consultation. Her energy is best spent there and on enforcement.’
On the HMO side, the key leverage is licensing, he adds. A property occupied by six unrelated tenants is a large HMO requiring a mandatory licence.
He says: ‘If none has been applied for, operating it is a criminal offence, exposing the landlord to prosecution and a substantial financial penalty, and potentially a rent repayment order allowing tenants to reclaim rent.’
If you suspect an HMO is unlicensed, you can report it to the local council’s housing team directly. When a licence application is made, neighbours can also make representations about the property’s suitability and management.
You can also report any poor conduct during construction if a property is being converted into an HMO. ‘For example, excessive dust may be a statutory nuisance under the Environmental Protection Act 1990 (environmental health); obstruction of the highway, particularly affecting disabled access, is a matter for the council and potentially the police; and workers entering a garden and removing the boundary fence are trespass, a civil matter you can raise directly or through a solicitor’s letter.’
This means in Anne’s case, the conversion being finished changes very little, Dunham says.
It is vital that homeowners keep a dated log with photographs, as that evidence underpins every one of these complaints.
Sutton Council has been approached for comment.