Planning for HMOs - A Practical Guide to Planning Permission for Houses in Multiple Occupation

By Martin Gaine

HMO LANDLORDS BEWARE - THE PLANNERS ARE COMING.

The HMO sector has boomed over the past 12 years - landlords have boosted returns by buying up houses, extending them and renting them to several sharers. This boom has drawn the attention of the pl

• Language: English
• Publisher: Spinlove Books
• Release date: Jun 13, 2022
• ISBN: 9781916870840

Book preview

Half-Title Page

Planning for HMOs by Martin Gaine

© 2022 Martin Gaine

www.martingaine.com/hmos

Published by Spinlove Books

Suite 45, 4 Spring Bridge Road, London, W5 2AA, UK

www.spinlove.co.uk

[e-mail]

© 2022 Martin Gaine

Martin Gaine has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as Author of this work. All rights reserved. No portion of this book may be reproduced in any form without permission from the publisher.

Cover by 5mediadesign

Interior layout by MrLasers.com

ISBN: 978-1-9168708-2-6

Title Page

Contents

Introduction: HMO Investors Beware – the Planners Are Coming

What You Need to Know

Chapter 1: What Is a HMO?

Definition of a HMO

The Growth of the Private Rental Sector

The Rise of HMOs

Regulation of HMOs

The Threat from Planning

Summary

Chapter 2: When Does a HMO Require Planning Permission?

What Is Planning?

Planning v. Licensing

The Use Classes Order

The Introduction of Use Class C4

Permitted Development

Article 4 Directions

How This Affects Landlords in Practice

Preparing for the Introduction of an Article 4

Opposing the Introduction of an Article 4

A Final Note on Changes of Use

Summary

Chapter 3: Understanding Planning Policies

The Planning Policy Hierarchy

The Development Plan

Finding HMO Planning Policies

Typical Policies Restricting HMOs

Summary

Chapter 4: How to Apply for Planning Permission

Choosing the Right Agent

The Application Documents You Need

Writing a Strong Supporting Statement

Submitting Your Application and Validation

Assessment and Decision on Your Application

Strengthening Your Application

Engaging with Your Case Officer

Are Pre-Apps Pointless?

The Withdrawal Method

Summary

Chapter 5: Dealing with a Refusal of Planning Permission

Reading and Understanding the Officer’s Report

Most Common Reasons for Refusal

Using a Planning Consultant

Resubmit, Appeal or Walk Away?

How to Appeal

The Appeal Process

Appeals Are an Important Planning Tool

Summary

Chapter 6: Learning from Previous Appeal Decisions

Lessons from Recent HMO Appeals

There Is a Surprisingly High Success Rate in Article 4 Areas

Investors Should Consider Converting Commercial Premises to HMOs

Some Councils Face a Lot of HMO Appeals

Issues Raised in HMO Appeals

Use of Planning Conditions

Costs Awards

Summary

Chapter 7: Certificates of Lawfulness and the 10-Year Rule

Householder Extensions Under Permitted Development

Article 4 Directions

The 10-Year Rule

Appealing a Refusal of a Certificate of Lawfulness

Summary

Chapter 8: Planning Enforcement

Why Enforcement Officers Are Targeting HMOs

What Tips the Council Off?

Enforcement Investigations

How Best to Deal with Enforcement Officers

Retrospective Applications

Just Comply?

It Is a Risk, But Not an Offence, to Be in Breach of Planning

The Awesome Power of an Enforcement Notice

The Importance of Avoiding an Enforcement Notice

(Almost) Always Appeal an Enforcement Notice

Withdrawal of an Enforcement Notice

Enforcement Notices and Buying at Auction

Recap – Am I in Trouble?

Summary

Chapter 9: Extending a House to Create a HMO

What Are Householder Permitted Development Rights?

The General Permitted Development Order

Class A: Single-Storey Side and Rear Extensions

Class A on Steroids: Larger Home Extensions

Class B: Hip-to-Gable Roof Extensions and Rear Dormer Extensions

Class E: Outbuildings

The New Class AA: Upwards Extensions

PD Rights for Existing HMOs

Danger: The Pitfalls with PD Rights

Summary

Afterword: The Future Is Bright (for Professional Landlords)

Planning for HMOs: Cheat Sheet

Glossary

Planning Resources

Introduction

HMO Investors Beware – the Planners Are Coming

The house in multiple occupation (HMO) sector has boomed over the past couple of decades as landlords chase higher yields than can be obtained from boring, vanilla buy-to-lets. It’s a simple formula – bigger houses, with more lettable rooms, let to individual tenants, generate higher rents.

The boom has triggered a regulatory backlash. In particular, more and more HMOs now need full planning permission. Decades ago, few did. In 2010, changes to planning law gave local councils the power to require that all new HMOs in their areas needed planning consent. Planning enforcement teams have targeted landlords who need permission and don’t have it, and some landlords have been forced to convert their HMO cash cows back into family houses.

An increasing number of councils are determined that no new HMOs shall be created in their districts and are refusing all applications that they receive. The government’s planning inspectorate handles appeals when planning permission has been refused. In 2010, they dealt with 83 appeals relating to HMOs. In 2020, they decided 528.

Figure 1: There has been a rapid rise in planning appeals for HMOs

Figure 1: There has been a rapid rise in planning appeals for HMOs

HMO landlords are familiar with the licensing regime – almost all HMOs now need a license – and they accept that the regime ensures minimum standards and keeps tenants safe. However, few landlords fully understand that many HMOs now need full planning permission, that some existing HMOs are unlawful and that the planning system poses a real threat to their businesses.

Planning pressure on HMOs is set to intensify. Every year, more councils introduce stricter planning controls, even over small, shared properties with as few as three sharers. This book sets out the planning context for HMOs and reveals the secrets for surviving in the HMO planning jungle.

What You Need to Know

I am a chartered town planner, working in an ever more complicated and intrusive planning system. I founded and run Just Planning (just-planning.co.uk), a specialist planning consultancy providing services to homeowners and smaller developers. We work with HMO landlords all over England, mostly getting involved when a planning application is refused or when they are facing enforcement action. I have represented hundreds of landlords who have found themselves in difficulties with local planners.

In this book, I explain how you ensure your HMO has the planning consents it needs, how to apply for permission if needed and how to deal with a planning refusal or, worse, an Enforcement Notice. I explain in detail how planners assess an application and how inspectors determine an appeal. I explain how to create a new HMO, or buy an existing one, without finding yourself in hot (planning) water.

Chapter 1 defines HMOs in planning terms, outlines their rapid growth in recent decades and explains why this has been accompanied by more, and more intrusive, regulation.

Chapter 2 explains when planning permission is required for a HMO and why the number of HMOs requiring permission is growing so quickly.

Chapter 3 explores how planning applications are decided and outlines the key planning policies adopted and applied by local planning authorities.

Chapter 4 tells you how to apply for planning permission: what documents are needed; the importance of a good supporting statement; the validation and decision-making process; and what you can do to improve your chances of success.

Chapter 5 sets out your options when planning permission is refused – should you walk away, resubmit or appeal? It looks at the most common reasons for HMO planning refusals and how to appeal, if you choose to do so.

Chapter 6 reviews all of the HMO planning appeals that were decided by the planning inspectorate in the first three months of 2021, drawing lessons for HMO landlords on making better planning submissions.

Chapter 7 considers whether HMOs may be permitted development and how to apply for a Certificate of Lawfulness to confirm that they do not require express planning consent. It explains how you may not need consent if your HMO has been running for a period of more than 10 years (the ten-year rule).

Chapter 8 looks at planning enforcement – the power of local planning authorities to take action against unauthorised development. Councils have been increasingly willing to take enforcement action and the consequences for a landlord can be grave.

Chapter 9 shows how you might extend a house using householder permitted development rights in order to create a profitable HMO.

Lastly, my Cheat Sheet summarises the main messages in this book, for you to use as a quick reference or refresher (a more colourful, illustrated version of the Cheat Sheet is available for download from martingaine.com/hmos).

The information provided in this book relates primarily to England, though much of it applies equally to Wales. Scotland and Northern Ireland have their own planning systems, albeit based on the same general principles. I provide general advice derived from my own experience over the years and it is not intended to be exhaustive. Planning is a complex world so always take professional advice that is bespoke to your situation before relying on any of the information in the following pages.

You may notice that I refer interchangeably to planners and case officers – in both cases, I mean employees of the council who process and assess planning applications. For ease of comprehension (and through force of habit), I refer to the bodies that decide planning applications as councils, though strictly speaking I mean local planning authorities. Terms that you might not be familiar with (planners love jargon!) are highlighted in bold and defined in the glossary at the back of the book.

Don’t forget to check out the HMO page on my website (martingaine.com/hmos) for bonus material, links to other resources and updates on the information in this book and on the world of Planning for HMOs in general. To be kept up to date with planning changes, sign up to my newsletter or join me on social media – I can be found on Facebook or Instagram as @martintheplanner.

Chapter 1

What Is a HMO?

Definition of a HMO

In simple terms, a house in multiple occupation (HMO) is a house or flat rented by sharers, rather than by a single family.

It is defined by the government as a dwelling occupied by more than two people who form more than one household and share basic facilities (such as a kitchen and bathroom). The definition therefore excludes properties occupied by a single family (no matter the number of family members) or flats and houses occupied by two sharers.

Figure 2: A HMO is at least 3 people in at least 2 households.

Figure 2: A HMO is at least 3 people in at least 2 households.

The building must be the occupiers’ main residence (thereby excluding hotels offering short stays). A typical HMO is a shared house or flat, perhaps let to students, or purpose-built, bed-sit accommodation with shared kitchens and dining rooms.

A building that has been subdivided into separate units of accommodation, each of which is self-contained with its own private cooking and washing facilities, is a collection of self-contained flats and not a HMO for planning purposes.

A household is a family unit, including couples (whether married or not). A group of friends, no matter how well acquainted, is not considered a single household. That they rented the dwelling as a single unit (i.e., at the same time and in one tenancy agreement) does not make them a single household. That there are no locks on bedroom doors and the friends socialise together does not make them a single household either.

The Growth of the Private Rental Sector

HMOs have been around for as long as people have needed low-cost housing to rent. In the nineteenth century, HMOs were large buildings with lots of bedrooms often shared by several different families. The housing was generally overcrowded and low quality. After the world wars, the government was determined to provide decent housing for its citizens and a massive house-building programme was launched; its vision was to replace overcrowded urban slums with individual family houses and flats with more green space. The government rebuilt urban centres, but also built whole new towns like Stevenage and Milton Keynes.

The Housing Act 1957 set out a fitness standard for housing that included proper facilities, water supply and drainage, plenty of natural light and ventilation, and well-designed rooms. Large houses that had been shared by several families were now occupied by single families, converted into flats or let by the room to unmarried lodgers, as Rigby did in the BBC sitcom Rising Damp. The rental market was limited and informal – there were some private sector landlords, but many people rented directly from their local council.

In the 1980s, however, a chunk of the public housing stock was sold off (through right-to-buy) and much of it found itself, ultimately, in the hands of private landlords. The government and councils stopped building new social housing and now subsidises rent for lower income households in the private rental sector (PRS), which has expanded hugely to meet demand. The introduction of the Assured Shorthold Tenancy (AST) in 1988 and the invention of the buy-to-let mortgage in 1996 created a more stable environment for landlords and made it easier for them to raise finance to build up portfolios. These twin reforms created the modern buy-to-let (BTL) sector and set off an explosion in property investing, creating a new class of amateur landlords investing for a little extra income and for their retirement.

By the noughties, the economy was roaring and house prices were on the rise. Hungry lenders were offering BTL mortgages at high loan-to-value (LTV) ratios and canny investors realised that they could repeatedly refinance their properties and reinvest as prices climbed, riding a boom fuelled by speculation and easy credit. It was a period in which it was difficult not to make money and it kickstarted the property investing careers of many of the UK’s landlords, including my own. A whole generation of landlords have known nothing but rapidly rising