Everything Medway Investors Need To Know About Planning Permission For HMOs

Hello readers,

If you’ve been following my blog for the past couple of weeks, you will be acutely aware of the challenges buy-to-let investors currently face due to the economic crisis.

However, us investors are a hardy bunch and always see an opportunity in adversity, so the question I posed was whether HMOs could be the way forward in a climate of increased mortgage rates.

Since writing this article, I’ve come across some statistics from Rightmove that highlights how ‘bills included’ has become the most searched-for term. I honestly think that there really is some weight to this thinking, and I’ve noticed an increase in enquiries from potential new investors, looking to expand their HMO portfolio to leverage the opportunity.

When advising investors on their strategy, something to carefully consider is planning permission. Undertaking an HMO conversion where you require planning permission but not having it approved can be an expensive mistake.

I thought it would be helpful to give a bit of an overview on the various planning statuses and considerations investors need to be aware of. The amount of legislation that needs to be met by HMO landlords is a big reason that specialist input is generally extremely beneficial.

Do I need planning permission?

This is a crucial question to ask, and the answer is sometimes yes, sometimes no. There are three planning statuses that investors need to be aware of and these are C3, C4 or Sui Generis which form the basis to whether an investor requires planning permission for an HMO.

  • C3 – Dwelling Houses

This is generally those living together as a single household as defined by the Housing Act 2004 under what could be construed as a family.

  • C4 – Houses of Multiple Occupation

An HMO is defined as a small, shared houses occupied by between three and six unrelated individuals, as their only or main residence, who share basic amenities such as a kitchen or bathroom.

  • Sui Generis

‘Sui generis’ is a Latin term that literally means ‘of its own kind’ or ‘unique’ – in this context it means ‘in a class of its own’.

Certain uses are specifically excluded from classification by legislation, and therefore become ‘sui generis’. Large Houses of Multiple Occupation, where seven or more people are resident, would fall into this category

Depending on the class, whether an investor requires planning permission to convert their property into an HMO will depend on things like the planning status and any local restrictions. The preferred route is through permitted development rights, however Local Authorities such as Bexley do have different requirements depending on the geographic area.

Permitted Development Rights

If your HMO is going to be occupied by six or less people (ie: move from a C3 to C4 planning class), planning law would classify this as a permitted development so no planning permission is needed.

Permitted development rights allow for a property’s use to be changed between planning classes without needing to obtain formal planning permission.

7+ Person HMOs – Sui Generis

In the event that you wish to have seven or more people living in your HMO, planning permission needs to be applied for to change the class to a ‘sui generis’ status.

Investors tend to have two options here and they can either do this immediately by going from C3 to sui generis or permitted development rights could be used to change from C3 to C4 and then planning permission applied for later to change from C4 to sui generis.

I tend to advise that investors change from a C3 to C4 first and then apply to change to sui generis if feasible because doing so can actually help the planning process go smoother and the application to have a higher likelihood of getting approved.

Article 4

There are exceptions to the rules on permitted development and Article 4 removes permitted development rights from a property. This means that planning permission needs to be sought to change the property to an HMO regardless of the number of floors or occupants.

Unlike local boroughs such as Bexley and Maidstone where there are article four restrictions, Medway currently has no Article 4 directive areas.

Additional & Selective Licensing

This is one to watch out for as the Housing Act 2004 allows local authorities discretionary powers to extend licensing to other categories of HMO that are currently not subject to mandatory licensing. This would be the case if, for example, the local Council deemed that HMOs in the area were causing anti-social problems.

Councils may also introduce Selective Licensing to limit the numbers of HMOs in the area if they believe the presence of HMOs is causing higher rates of anti-social behaviour in a certain area. However, local councils may also introduce Additional Licensing, normally requiring ALL rental properties to need a licence,

This also serves to outline the importance of fully researching your area, speaking with other investors, agents and even engaging with the local council’s housing officer as engaging at an early stage will help as you come to any planning and licensing that’s required.

If you’re an HMO investor looking to expand your portfolio into Medway, then it would be well worth considering booking onto one of my tailored discovery sessions that cover everything you need to know. Sessions last for two hours, cost £275 and have been extremely helpful for experienced and new investors alike! You can find more details and book on here.

Hasan

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