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HMO Planning Consent requirements spreading across the country with Article 4

Saturday 26th, January, 2013

Changes are on the way in many areas, with the way that local councils monitor and manage the Houses in Multiple Occupation in their area. This could affect many more landlords than expected, as many landlords may not even be aware that they have a HMO or that the rules apply to them, but would still be liable to the fines for non compliance.

In certain areas across the country, local councils are “opting in” to enforce Article 4 legislation in areas which come under their control.

Up until now HMO’s only need planning consent, in most jurisdictions, if they are over 5 occupants, and they would require licensing if the property is 3 storeys’s in height and has 5 or more unrelated occupants residing in the premises, with shared facilities.  Many local councils have imposed Article 4 legislation and insist on landlords obtaining planning consent before operating any HMO property (3 or more non related people living in a property with shared facilities). The classifications for a property as far as planning is concerned, would need to be changed from a dwelling house (Class C3) to a House in Multiple Occupation (a ‘small HMO’ – Class C4), Existing shared houses have established use and are not affected.

As Article 4 is optional it may not be implemented by all local authorities (such Kirklees MC), but according to a leading organisation, it is more likely to be enforced in areas with a high density of smaller and larger HMO properties – for example in city centres or where there are student communities.

This will have quite far reaching problems for potential landlords and the future housing stock in many areas. At a time when more and more people are turning to house shares to provide a solution to the current housing shortage, singular lifestyles and increasing living costs, this could lead to a lot less HMO’s being developed for a market in desperate need of more housing stock.

Although largely it will not affect current property stock, New HMO Landlords will find it more difficult to buy properties for conversion as they will have to do so “subject to planning” and may have to deal with neighbour objections that could be plentiful, out in the suburbs. The reason being that the original reason for the Article 4 was to prevent studentification, this is where lots and lots of HMO type properties set up in a certain area and then that area, becomes a student area, damaging that location, for the residents.

The government’s original intention’s, were to “spread” out the HMO’s in any town out into the suburbs and more residential areas, to prevent large colonies of students in any one area. The problem with this is that most residents of quiet “suburbs” will object profusely to a large HMO setting up in their backyard, they may well set up petitions against it and do anything to prevent planning being passed.

How this will help the housing stock, at a time when we have a predicted future shortage of no less than 750,000 homes by 2025, is difficult to see. HMO’s by nature, create 6 homes or more out of one, meaning this could be a great way to meet part of both the current and future demand.

Another problem which has previously been covered here, and this new Article 4 further adds to it, is the epidemic sweeping across the country of properties being “sublet” as HMO’s unknown to the owner/landlord. The problem with this being that the original “owner” of the property are the ones that would be liable for the fines imposed.

Many unscrupulous “property agents” are renting properties off Landlords and firms nationwide for a standard rental figure of say £550pcm, and then renting out rooms themselves to numerous individuals at say £300pcm, therefore making a large monthly profit.

The problem here is that the original landlord is unaware, and therefore unknowingly liable for prosecution for non compliance and breach of the Housing act 2004 and all of it HMO requirements, as well as the new planning and licensing laws, with fines potentially of well over £20,000.

With regards to “subletting” property to others, legal advice needs to be sought and make sure that the correct “management” type contract (this must not be an AST) is used. You must ensure that all relevant issues are covered in the management contract and the number of occupants are specified and it is listed as to who will be dealing with the HMO compliance and now planning issues, relating to it (if applicable).

For your independant portfolio review with your accommodation, speak to us direct by calling GoHaven on 01484 544300 or completing your details and our team can arrange an informal chat.  The company has been established in the Huddersfield area and as letting, managing agents, landlords and investors with over 30 years of experience of this sector.

 

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