Property Investors Beware

Birmingham and Wolverhampton City Councils (amongst others) are now using powers granted to them under Article 4(1) of the Town and Country Planning (General Permitted Development) Order 1995 to control the spread of Houses in Multiple Occupation (HMOs).

A HMO is defined on the government website as “a property rented out by at least 3 people who are not from 1 ‘household’ (e.g. a family) but share facilities like the bathroom and kitchen. This is sometimes referred to as a ‘house share’.”
It goes on to say:

“You must have a licence if you are renting out a large HMO” and “Your property is defined as a large HMO if all of the following apply:
• It is rented to 5 or more people who form more than 1 household; and
• It is at least 3 storeys high; and
• The tenants share toilet, bathroom or kitchen facilities.”

Even if your property is smaller and rented to fewer people, you may still need a licence, depending on the area the property is located in and as to whether or not Article 4 is being utilised.

Previously, Planning Permission was generally not needed to convert from C3 Use (a residential dwelling) to C4 Use (Houses in Multiple Occupation) as this was covered under permitted development rights. However, from November 2014 this was removed by Birmingham City Council who are now using Article 4 in major parts of Selly Oak, Edgbaston and Harborne to prevent the use of properties potentially harming the local community or causing an unbalanced neighbourhood.

Article 4 powers, requiring planning consent for small HMOs covering the whole of the City of Wolverhampton, come into effect on 13th September 2017 and will have a major effect on investors.
Anyone considering investing in residential property and converting it to a HMO or even buying a property that is sold as a HMO should check the planning situation with the local authority and the need for or existence and terms of any HMO licence.

HMOs, whether licenced or not, have additional responsibilities under Fire Safety Regulations and you should seek specialist advice on ensuring they are complied with.
For further information about HMOs, or to discuss any other aspect of residential conveyancing, please contact your local Thursfields branch, details of which are available on our website.

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