Navigating HMO Planning Permission: A Comprehensive Guide

Introduction

Homes in Multiple Occupations (HMOs) are emerging as a popular option in real estate. Due to their potential for higher rental rates, moving into the world of HMOs requires understanding the planning permission of the program is greatly required. Changing the use of any residence to an HMO requires planning authorisation. Converting a family home into a shared house or HMO for up to six persons usually does not require planning permission. However, in certain areas, Article 4 Directions have been implemented by Leicester City Council that eliminate this legal growth privilege. This guide will help you understand the granting of HMO planning permission and shed light on various considerations for landlords and investors.

Understanding of HMO planning

HMO houses consist of many people, using kitchen equipment and other amenities. Sometimes, it's a matter of issue that how many members can live and utilise the amenities. As a result, councils establish guidelines based on the number of people who live in the house. Planning is the formal authorisation from the Council or local authority for the alteration and erection of the building. Also, developments for Class C4 (small HMO) or Sui Generis (big HMO) use. 

Below is the classification of rental properties. Most rental properties are classified as either Dwelling Houses or Houses in Multiple Occupations.

Classification of different classes of rental properties

There are three main classes of properties that one should be aware of:

• Class C3: Dwelling House
• Class C4: Small HMO – 3-6 occupiers
• Large HMOs (Sui-Generis) – more than 7 occupiers

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1. Class C3: Dwelling House ( Single Household Occupancies/ Family Houses)

This type of dwelling house includes a single person or people who reside together as one family unit according to the regulations specified in the Housing Act 2004. This category typically consists of closely related individuals or couples cohabiting. There are no limitations on the number of individuals who constitute a single household.

In addition, Class C3 encompasses a single household and receives some form of care. The concept of a single household is not explicitly defined in this category. Furthermore, people live in single houses and do not care about each other. Examples of this category include small religious communities or homeowners residing with two lodgers.

2. Class C4: Small HMOs (Not more than 6 unrelated occupiers)

This class often applies to residences (houses or flats) occupied by 3 to 6 unrelated people as their only or primary dwelling. The basic amenities are shared, but the occupants live independently rather than as a family. Students or migratory workers who do not live in the property all year are somehow deemed to be occupying the property as their primary residence.

3. Large HMOs: (Sui Generis- with 7 or more occupiers)

These large HMOs are shared houses by 7 or more unrelated occupiers. The occupiers share basic amenities such as a kitchen or bathroom.

Importance of HMO Planning Permission

It directly depends on the type of class and the number of people living on the property.

Yes, HMO planning permission is required if you rent to 7 or more unrelated people, regardless of the number of beds.  

However, transitioning a C3 residence to a C4 HMO requires planning consent. Suppose your council revokes permitted development rights by implementing an Article 4 directive. This occurrence is becoming increasingly common, and you must be mindful of the consequences of non-compliance.

Article 4 area

Article 4 directive means that you need planning permission in some areas to change a home in an HMO property. The first HMO Article 4 Direction was enacted on August 20, 2014. In addition, HMO Article 4 Direction covering a larger city area took effect on February 17, 2023. Any house in the areas covered by this directive used for multiple purposes before the relevant date may continue to be used as a shared house.

Furthermore, on September 6, '22, the Council voted to ask for feedback on a decision to remove the right to convert a residential house into an HMO in certain areas of the city. The affected wards are Cheylesmore, Earlsdon, Foleshill, Lower Stoke, Radford, St. Michael's, Sherbourne, Wainbody, Whoberley, Westwood, and Upper Stoke.

If the decision is approved, it will take effect on September 20, 2023. Anyone who wants to convert a house into an HMO in these areas must apply for a change of use, even if the HMO will have fewer than seven tenants. Houses already used as HMOs with fewer than seven tenants won't need to apply for planning permission. But the landlord may want to consider getting a Lawful Development Certificate.

If the decision is implemented, it won't affect existing HMO licenses or future licenses for properties already HMOs. However, the Council only issues a one-year license if a property operates as an HMO without the correct permission. That allows the owner to seek the correct permission. Please note that this doesn't guarantee that HMO planning permission will be granted.

Furthermore, the Planning Enforcement team may take legal action against the property owner operating without the correct permission.

Article 4 Directives for HMOs in London Authorities

The following London councils have withdrawn permitted development rights. Thus, if you want to convert your house into an HMO inside those boroughs, you will need planning permission:

• Dagenham and Barking
• Greenwich
• Barnet
• Hillingdon 
• Haringey
• Lewisham (now covering the borough's south, with the remainder to join in September 2023),
• Newham
• Southwark
• The Waltham Forest

In addition, this does not prevent development, and some Article 4 guidelines do not apply to the entire borough. The list is incomplete, so check your local municipality's website before proceeding.

How to Get Permission for HMO Planning?

To apply for a C4 HMO plan. It must first be determined whether the property is located within the Article 4 directive area. A full planning application is necessary if an Article 4 directive covers the property area. However, this applies mainly when your local planning authority has implemented Article 4 Directions. That removes the automatic permission to convert a C3 property (Dwelling House) into a C4 property (HMO) without seeking planning approval under certain conditions. In such designated areas, transitioning from a C3 to a C4 property requires submitting a planning application and paying a fee of approximately £462 to the respective Council.

Sometimes, applying to convert a property to an HMO can be complex. Article 4 Directions are often implemented to maintain a balanced housing supply, and having an excessive number of HMOs in an area can lead to problems. The following concerns may arise in such cases:

• Less local charm
• Less single-family homes
• Lowered environmental quality
• More noise complaints
• More anti-social behaviour
• More Crime
• More parking problems
• The dominance of private rentals
• More strain on local services
• Low-quality housing

The property is not in an area covered by an Article 4 directive; hence, no comprehensive planning application is necessary. In the case of a property in a non-Article 4 Directive area, planning clearance can be obtained through authorised development. This is a 56-day prior notification application and is equally simple.

What happens if you don’t have HMO planning permission?

Operating an HMO without the proper planning permission, as defined by HMO planning guidance and legislation, is considered a "breach of planning." A planning breach occurs when HMO planning permission is not obtained or the approved conditions are not followed.

A planning breach itself is not illegal, and the Council may allow a retrospective application if HMO planning permission was not sought initially. However, the Council can issue an enforcement notice to restore the property to its original state. The local planning authority can also issue an enforcement notice when they believe planning control rules have been violated. Disobeying an enforcement notice is illegal and may lead to prosecution in a court of law.

Does the HM0 property need to be licenced?

This is highly distinct from the planning process, although not always. HMO licensing is obligatory for properties with 5 or more occupants. The Government has created a Guide for HMO Licensing. In these instances, licensing is compulsory to safeguard vulnerable and disadvantaged individuals by maintaining adequate health and safety standards.

However, a Council can opt to license all privately rented properties, known as 'Selective Licensing,' or license HMOs in specific areas or all areas, known as 'Additional Licensing.' It is advisable to consult your local Council, as failure to obtain the necessary license when renting your property may result in a fine of up to £20,000.

Conclusion

Remember that legislation and standards might change over time. HMO planning permission varies depending on where you live, the local legislation, and the specifics of your planning application. You must thoroughly research the conditions and obligations related to HMO planning permission. Any associated documentation issued by the local planning authority. If you have any doubts, consider a  legal or professional counsel to ensure you fully comply with all requirements and can successfully operate your HMO. To learn more about the HMO market and how to leverage the benefits you can list your property with amber.

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