Student landlords face planning postcode lottery

by Property118.com News Team

16:59 PM, 8th June 2012
About 6 years ago

Student landlords face planning postcode lottery

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Student landlords face planning postcode lottery

Inconsistent planning policies for student landlords are making some cities no-go zones for property investors.

The problems arise from ‘article 4 directions’ for small shared rental properties – where three to five tenants share a house.

Some councils, mostly in Labour-controlled council areas, are imposing the direction that requires a landlord to get planning permission before letting a small shared house.

Around 40 councils across England have applied or implemented the direction – with councils in Oxford, Milton Keynes and Newcastle leading the way.

Most of the directions are in university cities where councils claim shared houses are leading to the studentification of some neighbourhoods.

Letting a small shared house is a postcode lottery. In some cities, the article 4 direction only applies to some streets or neighbourhoods, while Oxford has a city-wide ban and refuses planning where the number of small shared houses exceeds 20% of the homes in any 100 metre stretch of road.

The latest council to consider article 4 directions are Falmouth and Leicester.

Leicester City Council has imposed a ban on student flat developments further than 800 metres walking distance from the University of Leicester or de Montfort University. Councillors are also considering an article 4 direction on small shared houses.

Meanwhile Cornwall County Council has rejected a plea for an article 4 direction from Falmouth Town Council on the grounds tightening planning controls is ‘premature’ during the reform of government housing benefit rules.

An article 4 consultation is also underway in Bath.

Student landlords have a window of opportunity in cities considering article 4 directions.

The process involves a consultation period and generally a 12-month period when planning for new small shared houses is not required.

Once the article 4 direction is implemented, any existing small shared house has planning permission by default without making any application to the council.



Comments

5:44 AM, 11th June 2012
About 6 years ago

Are the mortgage companies aware of the impact such licencing schemes may have on the mprtgage risk for shared occupancy properties.
I don't believe that underwriters have worked out yet that mortgage valuations are being and will be severely affected by these new schemes.
I can see them not willing to finance such property types and revert to lending on standard dwellings as they know there would be no issue with those.
This would leave shared tenanted properties potentially unsellable and also marked down in value by surveyors.
I reckon defacto every council will jump on this bandwagon.
The fees are just too juicy to ignore.
Personally I would want to be assure that any capital value could not be affected by the whims of councils.
Normal dwellings should never be affected.
I would just invest in these rather than squeezing a property type by getting as many tenants in as you can, with all the hassle that takes.
Peace of mind is what I would want.
Of course if this occurs it will increasingly difficult and expensive for people to source the cheapness of shared tenancies.
I don't care about that. I am only interested in me.
So I will stick with my conventional properties and leave the LL risk takers to indulge in sweating their assets!!

12:57 PM, 11th June 2012
About 6 years ago

As of 11th June 2012, 20 local authorities had
implemented Article 4 directions with another nine local authorities preparing
to implement, or consulting on the implementation of, Article 4 directions.

Full detail can be found of the website of the Residential
Landlords’ Association at: http://www.rla.org.uk/article4/article4_overview.shtml?zoom_highlight=article.

13:59 PM, 11th June 2012
About 6 years ago

As of 11th June 2012, 20 local authorities had
implemented Article 4 directions with another nine local authorities preparing
to implement, or consulting on the implementation of, Article 4 directions.

Full detail can be found of the website of the Residential
Landlords’ Association at: http://www.rla.org.uk/article4/article4_overview.shtml?zoom_highlight=article


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