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 unrelated occupiers.
Planning Permission not needed unless Article 4 applies
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. Over 30 authorities have made such designations.
The Old Law
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.
Definition of HMO
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 (where there are 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.
Position between April and October 2010
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.
Changes from October 2010 onwards
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.
Article 4 Directions
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 planning permission 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. There are details on the RLA website of Article 4 Directions where they have been made. Click here.
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.
Changes of use between April 2010 and October 2010
NB: This Section has been updated due to planning appeal decision and different advice is now given to that which was stated previously.
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 is unlawful. The permitted development rights granted from 1st October 2010 onwards (to permit a change of use from C3 single dwelling to C4 small HMO) are not retrospective. Since it is a material change of use itself which attracts the need for planning permission (not the subsequent ongoing use) any material change of use which took place between 6th April 2010 and 30th September 2010 has been carried out without planning permission even though if it had happened after the 1st October 2010 it would be legal without obtaining planning permission (unless an Article 4 Direction was in place). If an Article 4 Direction is in place planning permission will be needed in any event as permitted development rights do not apply. It may not be possible to obtain retrospective planning permission in this situation. It will depend in particular if there are other material considerations which suggest planning permission should not be grated e.g. lack of car parking provision. There is an argument to say that in this situation, however, it would not be expedient for a planning authority to take enforcement action (where no Article 4 Direction is in force).
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.
What is a material change of use
This will depend very much on the particular circumstances and we do not yet know for sure how the law will operate. Click here for more information
Do you need planning permission?
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.
Importantly, alongside any Article 4 Direction the local authority will have to put planning policies in place. There is a presumption that planning applications will be determined in accordance with the Local Development Plan, unless there are material considerations pointing to a different outcome. Planning Policies will vary from place to place depending on local circumstances. Planning Policies address concentrations of HMOs and the common feel is to impose restrictions on the numbers of HMOs in a given area where the direction applies. An increase of existing concentrations ought to stop the new concentrations developing. These policies are justified, according to local authorities, for a number of reasons e.g. mixed and balanced communities; preventing noise and anti social behaviour; safeguarding local amenities such as shops and schools; preventing the build up of waste etc. Restrictions may set the percentage of HMOs which are allowed in these areas e.g. 20% maximum in a radius of the property in question. If the limit is reached it is then most unlikely that planning permission will be granted and planning policy can also be relied on to support enforcement action where a property has been changed to an HMO without any required planning permission. Individual Council policies can be found on Council websites.
It is important to note that Article 4 Directions/Planning Policies cannot have retrospective effect. They cannot be used to remove established rights where a property can be lawfully used as a small HMO.
One of the problems where an Article 4 Direction is in force is a situation where a property has established lawful use to be used as an HMO but a landlord wants to let the property out to a family. The danger is that the property will revert to a C3 use (this does not need planning permission because there is a permitted development right to convert an existing C4 property back to C3. However, if subsequently the landlord wants to re-let the property to a group of sharers, for example, planning permission could well then be needed. Local planning policies may well mean that this is refused. Landlords will therefore have to think very carefully before renting out a property which is currently lawfully occupied as a shared house or other smaller HMO whether to a family, a single person, or only two unrelated individuals (NB: Two unrelated individuals are outside both Class C3 and Class C4 use).
These rules only apply in England (not Wales).
Updated November 2012