David Ormston and his wife Diane have found the value of their home in Sutton, Surrey, decline significantly following the conversion of their next-door property from a three-bedroom family house into a six-bedroom house in multiple occupation (HMO). The couple, who have lived on their quiet street for more than four decades, estimate that their property’s worth has dropped by approximately £25,000 since the neighboring home was transformed.

The transformation began after the previous occupant of the adjacent property passed away in September 2023. The house was subsequently sold at auction, and extensive building works including a loft conversion and rear extension were carried out over six months starting January 2024. Shortly after work commenced, Mr. Ormston was informed by Sutton Council that the property was set to become an HMO, accommodating six unrelated tenants.

Larger HMOs—defined as homes housing five or more people from at least two households—are subject to mandatory licensing in England. Mr. Ormston appealed the license to no avail, leaving him feeling powerless. He and his wife had planned to downsize and use the proceeds from selling their home to support their retirement, but the reduction in the property’s estimated value has complicated those plans.

Since February 2025, Sutton Council has introduced new rules requiring landlords to secure full planning permission for certain changes of use, including converting family homes into HMOs. This adjustment, implemented through an Article 4 direction, aims to limit permitted development rights in specific neighborhoods. However, these restrictions were not in place when the neighboring property underwent conversion.

David Ormston expressed concern not only over the financial impact but also about the condition of the converted property’s garden, which he says has become overgrown and attracts pests such as rats and foxes. Despite these issues, he acknowledges that the new tenants have been respectful neighbors, emphasizing that his upset stems from what he views as a lack of consideration and the substantial financial hit to his family’s asset.

Data indicates a 40 percent increase in applications to convert homes into HMOs between 2018 and 2024 across England, with an estimated 472,823 HMOs existing nationwide in 2025. While many HMOs provide affordable housing options and help landlords improve rental yields amid rising regulations and taxes, these properties have also drawn criticism for potential impacts on local communities. Common concerns include increased noise, parking congestion, and strain on waste management services.

Some residents report negative experiences with nearby HMOs, including disturbances from late-night parties and anti-social behavior, leading communities to take legal actions to prevent further conversions. However, experts caution against assuming an automatic decrease in neighboring property values due to HMOs without considering broader market conditions and comparable sales.

James Nightingall of HomeFinder AI noted that while noise, parking, and poor management may affect desirability, an HMO itself does not necessarily reduce the value of nearby properties outright.

The case in Sutton highlights the ongoing tension between the demand for affordable shared housing and the interests of long-term residents concerned about property values and neighborhood quality.