Planning for Houses in Multiple Occupation (HMOs): Pitfalls and Opportunities

Introduction

When it comes to investing in property, Houses in Multiple Occupation (HMOs) can offer a lucrative opportunity, especially for those starting off on their property development journey. However, it is important to be aware of the planning pitfalls and opportunities that come with this type of investment. In this article, we will explore everything you need to know about planning for HMOs, including the potential challenges and benefits.

What is a House in Multiple Occupation (HMO)?

Before we delve into the planning aspects, let's first understand what exactly constitutes a House in Multiple Occupation (HMO). In simple terms, an HMO is a property that is rented out to three or more people who are not from the same household but share common facilities such as a kitchen or bathroom.

Examples of HMOs include shared houses, student accommodation, and certain types of flats. The demand for HMOs has been on the rise in recent years, driven by factors such as increasing student populations and a growing number of young professionals looking for affordable housing options.

The key thing to remember is HMOs have some form of shared facilities. If each room has it's own cooking, living, sleeping and bathroom facilities, they are likely to be self-contained flats rather than HMOs.

Planning Permission for HMOs

When it comes to planning permission for HMOs, the rules and regulations can vary depending on the location. In some areas, you may need to obtain planning permission before you can convert a property into an HMO, while in others, it may be permitted development. There are generally two key factors that determine if planning permission is required - the size of the property & if an Article 4 Direction is in place. We delve deeper into these two key factors below.

It is crucial to check with the local planning authority to determine the specific requirements for HMOs in your area. Failure to comply with the necessary planning regulations can result in fines, enforcement action, and even the closure of the property.

The Size of the Property

The size of a House in Multiple Occupation is one key factor to determine if planning permission is required.

If a property has between three to six unrelated people living in the property with some shared facilities, such as a kitchen and bathroom, then in planning terms the property is classed as being within Use Class C4. This is often referred to as a small HMO. In many cases you can freely move from Use Class C3 (residential homes) to Use Class C4 (small HMO), unless there is an Article 4 Direction in place (more on that later!)

If the property has more than six unrelated people living there, and with some shared facilities, then in planning terms the property is classed as Sui Generis Use. Sui Generis Uses have extremely limited Permitted Development Rights, and as such if you want to change from a house or small HMO to Sui Generis Use, you will need full planning permission. This applies regardless of if a Article 4 direction is in place.

Article 4 Directions

A growing number of local authorities have introduced Article 4 Directions which stop the conversion of residential homes into small (6 people or less) HMOs. If an Article 4 Direction is in place you will need planning permission to create a HMO, regardless of if you are creating a HMO with 6 people (Use Class C4) or 7 people or more (Sui Generis).

It is crucial to check whether your property is subject to an Article 4 Direction to avoid any issues. This can be done by reviewing the local council's website, or contacting a trusted planning consultancy - like Cedar Planning.

Planning Considerations

If planning is required for your project, each local authority may have its own local policy to manage such planning applications. These policies will be found in the Local Plan for the area.

Common themes which are addressed in HMO policies include:

• Loss of family housing

• Over concentration of HMOs

• Noise

• Parking

• Space Standards

Some local authorities only allow a certain percentage of HMOs within a set radius of a property. For example, in Bristol planning applications must demonstrate that 10% or fewer of properties within a 100 metre radius would be HMOs. Many authorities also look to restrict proposals for HMOs that would result in the 'sandwiching' of properties between different HMOs.

Noise is a common concern for local residents, normally based on fears of the poorly maintained HMOs of the past. Nowadays modern HMOs are very different, but there is still a need in many local authorities to convince the Council that noise impacts won't be created by the proposal. Once such way is by submitting a Management Plan with an application, demonstrating how potential issues with noise or anti-social behaviour will be combated. The internal layout of a HMO can also limit noise concerns by ensuring that the nosier elements of a HMO (kitchen/living/dining room) are located in similar spaces in adjoining properties.

Parking is another common concern with HMOs. In many areas this can be overcome, but you will need to be wary of the different parking standards set out in the Council's local policies.

Where planning permission is required, many local policies and guidance set out a minimum requirement for the space and use of HMOs. Commonly they will require bedrooms, kitchens, amenity space and bathrooms to be a certain size (including width not just overall floorspace).

If you are looking to secure planning permission as risk free and easily as possible for a HMO it is essential to address these themes.

Planning v Licensing

It is important to remember that planning and licensing are very different things. When purchasing a property that is currently being used as a HMO it is important to check that the property has both the correct planning status (if required) and licensing.

For example, a property may have been used as a HMO in accordance with its license. But, if it does not have the correct planning permission in place, you could be served with an enforcement notice by the Council. This would either require you to revert the building back to a residential home, or take action to regularise the use, either through a retrospective application or Certificate of Lawfulness application.

Conclusion

When considering investing in houses in multiple occupation (HMOs), it is crucial to be aware of the planning pitfalls and opportunities that come with this type of investment. Understanding the specific planning requirements in your area, addressing neighbourhood concerns, and taking advantage of the high rental yields and increased demand can help you navigate the planning process and maximize the potential of your HMO investment.

Remember to always consult with the local planning authority, seek professional advice if needed, and stay informed about any changes in planning regulations that may affect your HMO property.