Landlords - Changes to Sharers, HMO's and Planning for Rentals

Statutory Instrument 653 means that any property from now onwards which the owners want to convert from a single house into a small shared property may well require planning permission. The Government anticipates that as a result of the rule change, a further 8,500 planning applications will be generated each year.

The legislation is not retrospective and will not affect properties with an existing use. But it will catch any house that will, for the first time, be rented out to between three and six sharers or where the home-owner decides to take in more than two paying lodgers. These properties now count as HMOs with a new planning class designation, C4.

The aim of the legislation is to prevent so-called ‘studentification’ whereby rows of terrace houses in university towns and cities are rented out to students. Landlord groups have been fighting to prevent the change happening, and David Cameron has tabled an Early Day Motion to get it repealed.

Law Blogs have also pointed out that the legislation is extremely unclear because the need for planning permission depends on a material change of use. In the past, courts have taken different views on whether a property used for residential purposes has undergone a material change of use if it is still used for residential purposes.

There is a further problem that all we should be aware of. Many rental properties are let out to both families and to groups of sharers at different times, but landlords should be advised that if they let out to between three and six sharers (Class use C4) and then let out to a family (Class use C3), they will have changed the class. That means that if they want to re-let to between three and six sharers again, they might have to seek planning permission, which could be refused, though in reality it is unlikely. If the motive is to prevent ‘Studentification’ then there should be no hurdles to achieve the opposite.

We also need to be aware of the enigma of letting property out to 4 sharers one year, but then only two sharers the next. Landlords cannot count on getting planning permission to return the property to C4 use. In real and practical terms, however, I believe that to change use to an HMO will require consent, but to change it back will prove unnecessary. Its really up to the local authority.

Agents should also note that a C3 HMO currently shared by between three and six tenants will not need planning permission to become a single household. Simply, this legislation is absolutely stupid and will be amended. Its part of what is called the ‘sweeping process’ where legislation is rushed through before the end of Parliament.

Simply, I wouldn’t worry about the implications too much. In the words of Hitchhikers Guide to the Galaxy – DON’T PANIC! Just remain mindful of existing HMO legislation. Most Landlords tend to like the same type of tenants. Remember, planning is only required for change of use – so if its rented to sharers now, then there shouldn’t be a problem. If you decide to rent a property for the first time and are happy for 3 or more sharers, a quick call to the planning office, a note on file of time date and with whom you spoke can’t hurt.

I would be very surprised if planning offices in most London Boroughs would be really interested particularly given most Environmental Health Departments have not yet got on top of HMO licensing! Nevertheless, the sensible advice to at least check, as this is just an opinion. The Law is the Law and we must observe it. Nevertheless, it seems so unclear at present that is near impossible to police. On a final note, I telephoned one Planning Office in a London Borough, and they had absolutely no idea what legislation I was talking about!! Upon further questioning and a few minutes on hold, I was told "No, of course you don't need planning permission to rent you house out." Oh yes you do.

I will update further as the muddies waters clear. Just thank your lucky stars you aren’t in the planning department!!

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