The housing crisis in this country and its supposed solutions

[Squid]

With the new law banning no fault evictions many private landlords are selling up

Many others in larger properties are converting them to HMO

HMO occupants have zero rights compared to assured shorthold tenants

Therefold due to the supply demand chain rents will increase significantly

Not true.  I can't speak for Serco HMO's run on behalf of the government,  but all tenants in private landlord's HMOs, run professionally,  get an Assured Shorthand Tenancy agreement with more or less the same rights and obligations of a single dwelling tenancy.  

Mortgage companies and insurers insist on this.

There are however numerous unlicensed HMO's where this does not occur.  They are usually shyte holes with short term tenants usually with some sort of problem.

Also, running a HMO, while profitable, is a whole other level of work and overheads compared to just letting out a property as a single dwelling. If people are finding the thought of no fault evictions too much hassle, they certainly won't be looking to get into the HMO tenant market.