HMO investors must not shun planning opportunity

by Mark Alexander

7 years ago

HMO investors must not shun planning opportunity

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HMO investors must not shun planning opportunity

Time is running out in some cities for house in multiple occupation (HMO) investors to expand their property portfolios.

The repeal of HMO planning rules by Housing Minister Grant Shapps has given property investors who want to open new shared houses or extend existing properties a window of opportunity.

Currently, all HMOs shared by five or more tenants and three storeys or more must gain planning permission, but homes for three to five sharers are exempt.

The outgoing Labour government changed the rules in April to bring the smaller HMO planning constraints in line with those of larger HMOs. The new coalition government overturned these rules in October.

But councils can take on planning controls to cover all shared houses if they give 12-month’s notice to the government and run a consultation period.

Many councils want to take on these ‘article 4’ powers – named after the section of the Housing Act 2004 that details the controls – but are hesitating due to legal action by landlords and letting agents claiming loss of earnings from the imposition of planning controls.

Some have already finished consultation and have announced they will go ahead with tighter planning and licensing.

The three councils at the vanguard of HMO planning and licensing controls are Oxford, Milton Keynes and Newcastle-upon-Tyne.

Oxford intends to phase in watered-down HMO controls from January after the threat of legal action from landlords.

Oxford and the other two councils are also forcing the government to undergo a judicial review of HMO rules in the High Court after challenging the repeal of planning laws.

The verdict of this action is awaited.

Meanwhile councils in Manchester and Exeter have announced they will control HMO planning from October next year. Other councils seeking to take on these powers include Leeds, York, Nottingham, and Loughborough.

Councils want to take on HMO planning controls due to complaints from neighbours about antisocial behaviour and ‘studentification’ of some districts in university cities that create out-of-term ghost towns.


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