Planning Use Laws for HMOs in the Private Rented Sector

As from 1st October 2010 new regulations came into force which affect houses and flats let to groups of sharers (e.g. students, migrant workers, young professionals etc) as well as small bedsits.  These new regulations supersede the earlier changes affecting this type of accommodation which were introduced by the previous Labour Government which were effective from 6th April 2010.  The properties to which the rules apply are those which have between 3 and 6 occupiers. 

The major change taking place on 1st October 2010 is that planning permission is no longer required where a single house/flat occupied by a family is rented out as a small shared house/flat or bedsit for the first time after 6th April 2010, unless the local planning authority have made what is called an Article 4 Direction affecting the area where the property is located.  Various authorities are in the process of making such designations.   

Prior to 6th April 2010, there was a single use class (C3) which consisted of houses or flats lived in by a single person; by a family; or by a group of up to 6 unrelated sharers who lived as a single household.  You could change between these uses without needing planning consent.    As far as bedsits were concerned before that date all bedsits (irrespective of the number of occupants) were treated as houses in multiple occupation for planning purposes so planning permission would have been required to change the use of a C3 house to bedsits. 

Originally also planning law used different definitions to those which apply for housing/environmental health purposes.  However, from 6th April 2010 a new use class was created which now consists of any house or flat rented out in the private rented sector which is not occupied by a family, where the number of occupants is between 3 and 6.  For these purposes “family” is defined in the same way as under the Housing Act 2004 for housing/environmental health purposes.  Thus the 2004 Act definition of a HMO now applies for planning purposes as well.  What this means therefore is that shared houses/flats lived in by unrelated persons were taken out of C3 and together with small bedsits (with between 3 and 6 occupants) now have their own use class (C4).  Those properties which were already used in this way as at 6th April 2010 were automatically transferred into this new use class C4.  Single family homes/flats remain in the modified class C3. 

What this meant at the time was that after 6th April 2010 if there was a material change of use involved if you wanted to change the use of an existing single family dwelling to a use which is now within the new C4 use class you had to apply for and obtain planning permission.  However if you wanted to change the use the other way around from a class C4 HMO to a single family dwellinghouse then planning permission was automatically granted by what is know as the General Development Order.  These rules were not retrospective so planning permission was not needed for any small HMO (within class C4) which already had that use as at 6th April 2010.  It did not matter how long it had been used in this way.

The RLA and others campaigned vigorously to oppose these changes.  As a result the Coalition Government have modified the Regulations with affect from October 2010.  The newly introduced system of use classes has not been altered and this remains the same.  What has happened is that planning permission is now automatically granted by the General Development Order where an existing single family dwelling (C3) is used as a small HMO (within class C4) or vice versa.  Previously it was only where you went from C4 back to a C3 a single family dwelling that the automatic planning permission was given.  Now it is granted where the change of use is either way. 

This is however subject to the right of the Local Planning Authority to make what is called an Article 4 Direction where they consider this appropriate for the proper planning of the area.  Where an Article 4 Direction is in force if there is a material change of use involved then planning permission will have to be obtained.  It is not always clear when a material change of use will be involved.  It is possible that in such a situation that it will not be forthcoming because Article 4 Directions will only be made where the Local Planning Authority wants to restrict new HMOs.

There are constraints on local planning authorities when it comes to making an Article 4 Direction.  Unless they give a year’s notice they have to pay compensation for the loss of the automatic development rights.  Also, when an Article 4 Direction is in place, the Local Planning Authority has to process the planning application without charging a fee, although this may change.  In reality what this therefore means is that it is highly unlikely that any Local Planning Authority is going to make an Article for Direction without giving a years notice, so that they can then avoid any potential claims for compensation.  So far all authorities (with one possible exception) making Article 4 Directions have said they will give one year’s notice. The first Article 4 Direction is therefore likely to become effective on October 2011.  Again, there are details on the RLA website.

If your Local Planning Authority makes an Article 4 Direction you need to decide if you want to change the use of a property (e.g. to a shared house) before it takes effect.

Where the use of a property was changed from a single family dwelling to a small HMO, such as a shared house, between the 6th April 2010 and 30th September 2010 without planning permission (presuming that it was required because it involves a material change of use), the change of use will now be automatically legitimised by the new regulations position may be different if an Enforcement Notice had already been served in the meantime.

These changes do not just affect landlords in the private rented sector.  They can apply to owner/occupiers who let out accommodation in their own homes, where three or more unrelated individuals are living with them.  Lettings in the social sector (e.g. council houses and lettings by housing associations) are not affected by these rules. 

Thus, at the end of the day, it will all depend on whether or not there is an Article 4 Direction in place in future as to whether or not planning permission is needed.  Even then there must be a material change of use which will depend on the circumstances, particularly the impact (if any) on the neighbourhood.  Where an Article 4 Direction is in place, if there is a material change of use, then planning permission will be needed. 

These rules only apply in England (not Wales).  They are currently under challenge as permission has been given to Milton Keynes and other Councils to challenge them by way of judicial review.  The outcome of this is awaited.