THE PROPERTY FILTER TAKE
Under the Renters' Rights Act (in England, from 1 May 2026), landlords who use Ground 1A to regain possession for a sale face a mandatory 12-month ban on re-letting the property if that sale falls through.
HMO landlords are doubly exposed: Ground 1A applies per property rather than per room, 60% of landlord-listed flats failed to find a buyer in 2025, and the average flat took 85 days to go under offer in June 2026 - before this restriction even existed (Hamptons, July 2026).
If you hold an HMO flat and are considering a Ground 1A notice, you may wish to model the full 12-month vacancy cost against your current room-rate income and ongoing mortgage payments before serving notice.
The maths on selling an HMO (house in multiple occupation) just got harder. Under the Renters' Rights Act, up to 100,000 ex-rental homes in England could be left empty for up to a year if a Ground 1A sale falls through, according to analysis by Hamptons (Mortgage Finance Gazette, 13 July 2026). The mechanism is specific, the exposure for HMO landlords is acute, and most have not fully priced it in.
That figure is not a live vacancy count. Hamptons applied today's rules to 2025 sales data to estimate how many failed sales would have been frozen out of the rental market had Ground 1A been in place at the time.
What does Ground 1A actually mean for an HMO landlord?
Ground 1A (a mandatory possession ground under the Renters' Rights Act, available in England from 1 May 2026) lets landlords give tenants 4 months' notice to leave so the property can be sold with vacant possession. The problem is what happens when the sale falls through.
Once Ground 1A is used, the property cannot be re-let for 12 months - even if no buyer materialises. The landlord is left with an empty building, no rental income, and no legal route back into the market until that clock runs out.
For an HMO landlord, this lands harder than it does on a single-let landlord. Ground 1A applies per property, not per room. You need all rooms vacant before the ground can be used. If the sale collapses, the whole property sits empty - not just one room. Use our HMO valuation calculator to model what a 12-month void does to your net return before committing to any notice.
Why are HMO flats particularly at risk?
According to Hamptons (July 2026), 51% of homes listed for sale by landlords in 2025 failed to sell. Among flats, that failure rate rose to 60%. These are pre-Ground 1A numbers - sales attempted without any re-letting restriction attached to failure.
Flats are also slower to transact. Hamptons (July 2026) reports the average flat took 85 days to go under offer in June 2026, compared with 59 days for a house. A longer sale window means more time for a buyer to pull out.
The concentration of ex-rental stock in the flat market makes this significant. According to Hamptons (July 2026), 24.4% of all flats marketed for sale in June 2026 had previously been rented, compared with just 7.8% of houses.
Southern England adds another layer of pressure. Hamptons specifically flags higher prices, lower yields, and slower transaction times in the South as factors that make a Ground 1A failure particularly costly (Hamptons, July 2026). Review property investment strategies to stress-test any sale decision against a realistic worst-case vacancy period.
What should licence holders check before serving notice?
Your HMO licence, issued by your local council under the Housing Act 2004, runs independently of the Renters' Rights Act. The Act does not change licensing obligations. Mandatory licensing still applies to any property with 5 or more occupants from 2 or more separate households.
What matters here: your licence conditions do not pause because a property is void. Check your licence before assuming an empty building is easier to manage. Birmingham's additional licensing scheme requires active property management standards to be maintained even during void periods. Manchester's licensing team expects fire safety systems and common area standards to remain in place regardless of occupancy. The council requires it - check your licence.
The market data suggests landlords are already recalibrating. Hamptons reports that landlords accounted for 10.2% of all property purchases in June 2026, while previously rented homes made up just 9.2% of sales listings (Hamptons, July 2026). For the first time since 2019, landlord buying exceeded landlord selling - a signal that more sellers are running the numbers before serving notice.
Access the free resources hub for licence compliance guides, and visit business and systems to review how operational structure shapes a more resilient exit strategy.
Key takeaways
Up to 100,000 ex-rental homes could be locked out of the market for 12 months if a Ground 1A sale collapses, based on Hamptons' analysis of 2025 data (July 2026).
60% of landlord-listed flats failed to sell in 2025 - before the Ground 1A re-letting restriction even existed.
The average flat took 85 days to go under offer in June 2026, versus 59 days for a house, extending the window in which a sale can fail.
Ground 1A applies per property, not per room, meaning the entire HMO income stops the moment the ground is used.
Landlord buying now exceeds landlord selling for the first time since 2019, suggesting sellers are growing more cautious about Ground 1A notices.
Frequently asked questions
What is Ground 1A under the Renters' Rights Act?
Does the 12-month re-letting restriction apply per room or per property in an HMO?
Is my HMO licence affected by the Renters' Rights Act?
Can I continue marketing the property for sale during the 12-month restriction?
