House in Multiple Occupation (HMO) - Monoperty | Buy-To-Let and Landlord Education

The rules and regulations surrounding a House in Multiple Occupation (HMO) can be complex. So your first question might be: Do properties used as HMOs require planning permission? Not all properties used as an HMO require planning permission. Planning permission will only be needed if the local council has blocked HMO conversions using Article 4 Directions within the property’s location, or if the property will accommodate more than six unrelated people. An HMO can be an excellent addition to your property portfolio. The returns can be higher than a typical family buy-to-let and are therefore an attractive investment vehicle for private landlords. They are also attractive to tenants. This is because a shared house can offer affordable accommodation for single people, often close to local facilities and public transport. Permitted development rights allow you to convert a single property into an HMO in most cases. However, some councils use Article 4 Directions to block some permitted development rights. Suppose your property is covered by Article 4 Direction, which blocks the automatic conversion to an HMO. In that case, you will need to apply for planning permission. Article 4 Directions are more commonly found in large cities and towns and can be found in many parts of London and Birmingham. However, they are increasingly being used in market towns and more rural areas. Local councils can use Article 4 Directions for several reasons, and they don’t always stop the conversion of properties to new HMOs. Therefore, it is worth checking what the Article 4 Direction actually covers if it applies to your property. You may still be allowed to convert a property to an HMO without planning permission. If your HMO is in an Article 4 area, then this should have come up in the searches made as part of the property buying process. However, if you have owned the property for a while, it is worth checking with your council as things may have changed since you first bought it. You can find your local Planning Authority by visiting planningportal.co.uk. In planning terms, a property that accommodates more than six unrelated people who share facilities such as bathrooms and/or kitchens becomes Sui Generis, meaning a class of its own. Planning permission will be required to change the Class of Use from Class C3 family dwelling, to Class C4 HMOs. These types of properties are also referred to as large HMOs. If you need to apply for planning permission, this doesn’t automatically mean that your planning permission will be refused. This is because local councils use Article 4 Directions to take into account a wide range of considerations, such as impacts relating to noise, traffic and parking through the planning system, which they cannot consider through permitted development. If you submit a planning application, the city council will have 8 weeks to decide whether to grant planning permission or not. If they refuse you planning permission, you have a right to appeal the decision to an independent Planning Inspector. What’s The Difference Between HMO Planning And HMO Licensing? HMO planning permission is concerned with the use of the property, and HMO Licensing is concerned with the required standards and safety of the property. It is easy to mistake the two, but planning permission for an HMO and HMO licensing is different, and you must have both if required. Having planning permission for a Class C4 HMO does not grant you a mandatory HMO Licence; vice versa, having an HMO license doesn’t grant you planning permission. This is an important distinction, so what’s the difference? Planning permission relates to the class of use of a property - is the area and/or property suitability for an HMO. If you do need planning permission to convert your property into an HMO, then gaining planning permission should be your first task. Once you have your planning permission or worked out that you can covert under permitted development rights, you should then move into the realm of HMO licensing. There are three different licensing schemes - mandatory licensing, additional licensing and selective licensing (the latter covers more generally private rental housing). Mandatory licensing is often referred to as HMO licensing. If you have more than 5 occupants in your HMO, it is required. Local authorities apply additional licensing and can sometimes cover a whole town or specific streets or neighbourhoods. Under the Housing Act, local councils can require additional licensing in areas where they consider a significant proportion of HMOs is poorly managed. Unlike mandatory licensing, additional licensing can be applied to HMOs of all sizes. The requirements of additional licensing vary widely from area to area. The most common conditions include: The capability of the property manager (this could be the HMO landlord or the letting agent). Make sure the correct procedures are in place for emergencies and disputes. The sizes of rooms - bedrooms and communal spaces. If the amenities (e.g. kitchen and bathrooms) are enough to cater for the number of people in the property. A fire alarm system that is appropriate for the size of the main residence. An annual gas safety certificate. Selective licensing applies to all privately rented properties in an area designated by the local council. The requirements are similar to mandatory and additional licensing, but they apply to all rental properties. If you rent your HMO property without the necessary licence, you risk being fined. Fines can be as high as £20,000, so it is always worth checking with the local planning authority if you are ever unsure. In addition to the above, if you are converting a property, it is important to remember thank you may need Building Regulations approval for some of the works. So, yes, something else to add to the long list of tasks! Is A HMO A Residential Property? An HMO is any residential property that is let to three or more unrelated tenants who form more than two households and share the kitchen and/or bathroom facilities and basic amenities. The Use Classes used in the planning system differentiate between smaller HMOs, with between 3 - 6 unrelated people living there, and larger HMOs that accommodate 7 or more unrelated people. HMOs with between 3 - 6 unrelated people are classified for planning purposes as C4 uses. If more than 7 unrelated individuals live in the HMO, it is classified as Sui Generis. Sui Generis is a planning Use Class that covers various uses, including betting offices, laundrettes, tattoo parlours, fuel stations, taxi businesses, nightclubs and large HMOs. It is essential to differentiate between small HMOs and large HMOs. For example, suppose you either want to convert a property to an HMO or convert it to another use from an HMO. In that case, different rules apply to C4 and Sui Generis buildings. Can A House Be Converted To A HMO Under Permitted Development Rights? In most cases, yes, a house can be converted to an HMO under general permitted development rights. However, if the HMO is to be used by more than 7 unrelated occupants, or is located in an Article 4 Direction area, then you will need to apply for planning permission. Some people uncover planning issues when purchasing or selling an HMO. If you later discover that your HMO requires planning permission, but planning hasn’t ever been granted, you have two options: 1. You can submit what is known as a retrospective planning application to the council, which they will either approve or refuse. 2. If your property has been used as an HMO for over 10 years, and you have sufficient evidence to support this, you can apply for a Lawful Development Certificate, which demonstrates that your HMO is lawfully an HMO. Beware that for Lawful Development Certificates, the burden of proof lies with the applicant. So you will need to ensure that your evidence is robust and covers a continuous period of at least 10 years. If you are refused a Lawful Development Certificate or planning permission, you have the right to appeal to an independent Planning Inspector. However, you can be waiting several months for a decision, so it is always best to make sure you have the correct information first to save yourself time and stress later down the line. Similarly, people uncover planning issues when they are visited by the local council’s enforcement team, which investigates breaches of planning permissions. They will either issue you with an enforcement notice requiring you to return the property to a single household or require you to submit a planning application. Again, you can challenge an enforcement notice via an appeal. However, stating that you weren’t aware of the rules is unlikely to succeed. Can A HMO Be Converted Back To A House? An HMO can be converted back to a house depending on the size and whether an Article 4 Direction is in place. For example, a small HMO accommodating 3 to 6 unrelated people can be converted back to a house under permitted development rights, as long as an Article 4 Direction isn’t in place. In the planning Use Classes, HMOs with 7 or more residents are classified as Sui Generis. So if you are converting a large HMO back to a family home, you need to apply for planning permission. Again this doesn’t mean that the council will refuse your application. It just means it needs to go through the planning process. If you have decided that the property would be more profitable within your portfolio as a house, or if you are looking to sell and believe it would be beneficial to change the Class of Use, you should check the requirements with your local authority. If you are converting an HMO back to a house, you will need to be mindful that new single family houses need to meet minimum space standards set by the government. The above provides you with an overview of planning requirements for HMOs if you are a property owner and are considering your options. The primary considerations are: the number of unrelated occupants, Article 4 Directions and don’t forget about licensing! If you are unsure if you need planning permission for your HMO, it is advisable to seek professional advice from your local council or a planning consultant. They will be able to offer application advice and further information.