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Large Sui Generis HMOs - Is Planning Permission Actually Needed?

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This article challenges the commonly held views about the need to obtain planning permission for investment properties. The intention is to highlight inconsistencies in widely believed interpretations of planning laws, in order to assist property investors. However, the matters discussed are subject to change as the Communities, Local Government Department, and councils publish their own guidance. Neither the partners nor any employee of APYork can accept any responsibility for any reliance based on the information provided and you should obtain your own independent advice, which may mean not relying on your local planning office.



Introduction

This is the third of three articles about planning. Rather than repeat all the points made previously, it is assumed you have read and understood the previous article about smaller C4 HMOs:

C4 HMOs and Article 4 Direction - Is Planning Permission Actually Needed?

A point often missed by landlords in the past is that for planning purposes shared properties were split into two categories, those with up to six occupants and those with seven or more. These larger shared houses are unclassified by the Town and Country Planning (Use Classes) Order 1987 (SI 764/1987) (UCO). In planning terms they are described as being sui generis (of their own kind).

Even if the point was missed in the past, the introduction of the new C4 class has clearly highlighted the different category. Now that the Housing Act 2004 definition of HMO applies for planning purposes, we will refer to a shared property with seven or more occupants as a large shared HMO. (A house split into flats or bedsits was an HMO for planning purposes even before the 2010 changes. The conversion is a material change of use that required planning permission. These are not shared properties and, for the purpose of this article do not fall into our definition of a large shared HMO.)

There is a common assumption that a planning application will be required for a change of use from a C3 dwellinghouse to a large shared HMO or from a class C4 HMO to a large shared HMO. However, the fundamentals of planning law still apply and it remains a basic point that planning permission is only required if there is a material change of use.


Contrast with C4 HMOs

This article could end now just go back to the previous article, read the arguments about material change of use and in many cases the problem is solved. However, there are more subtle points to appreciate.


Historical background

Remember, 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 six unrelated sharers who lived as a single household. You could change between these uses without needing planning consent. Therefore, before this date, for planning purposes, the larger shared houses (more often than not student houses) were not HMOs. However, for some reason not clearly identified in the relevant planning law, it has been suggested they needed planning permission.


Practice

Frankly, as planning was not needed for smaller shared houses occupying up to six sharers and as larger shared houses are relatively few in number and not specifically classified in the UCO, it is fair to say that the need or lack of need for planning permission has depended upon the local authority and usually been widely ignored.

Typically, if asked, a local planning authority might claim that, strictly speaking, a large shared HMO needs planning permission but not actively seek out those for which an application had not been made. In practice local planning authorities rarely take action unless they receive a complaint about an HMO. Even then most have taken the view that as long as there are no more than "about" six people sharing most facilities with no question of overcrowding, then no action is necessary.


Current position

So now we have the Housing Act 2004 definition of HMO brought into planning permission. Those houses split into flats or bedsits always were HMOs, so are not affected by any change in legislation. The small shared houses are now identified as a new class but given deemed permitted development under the GPDO unless an Article 4 direction is in force. Where such a direction is introduced, any existing small shared house HMOs have established use and do not require any planning permission. If anything, the 2010 change in planning law has highlighted the separate status of large shared HMOs, but not provided any new guidance of how they should be treated for planning purposes.


Enforcement

For some reason, all of a sudden City of York Council has developed an interest in large shared HMOs. Leaving aside the question of why, letters have been issued to letting agents and/or owners stating that permitted development rights only apply for properties with up to six persons sharing, and alleging "it is highly likely" that the large shared HMOs will require planning permission. Frankly, this is very soft language for planning enforcement and, if you look at the evidence, it is highly likely they do not.

In reality the local planning authority has a significant hurdle to jump before it can do anything about the use that is being made of a property. It is not a criminal offence to breach the use class orders without formal permission. It only becomes a criminal offence if enforcement action is taken to stop the property owner using the property in its current use and the owner does not appeal against the enforcement action or, if they do, they are unsuccessful. The owner can appeal against enforcement action and one of the grounds is that enforcement is not justified as the current use is not causing any greater harm than the permitted use. The arguments mentioned in the previous article may be used.

Also, beware of treating changes between use classes as meaning that planning permission is needed where it was not before. Just because uses are in different classes, or one use is sui generis, does not necessarily mean that permission is required to change the use. Remember the comments of the planning inspector in the appeal referred to in the last article. There is no limit on the number of members of the single household under C3 dwellinghouse. It seems fair to say that whether a dwelling is occupied by a family or a number of unrelated people does not alter the nature of the use. This is obviously correct and will make it difficult to enforce against changes in occupation. If a large family including adult children with cars occupy a house and then rent it out to a similar number of unrelated individuals, is that really likely to lead to a genuine change in use where the external impacts are likely to be largely the same?

In addition, paragraph 17 of PPG18 clearly states that an enforcement notice should not normally be issued solely to "regularise" development which is acceptable on its planning merits, but for which permission has not been sought. Instead local planning authority should persuade the owner to seek planning permission if it is required. It is worth noting that even this provision only applies where there has been "development", ie a material change of use.


Summary

In most cases, the chances are that a large shared HMO without planning can operate without problems. Frankly, in normal circumstances it is unlikely the local planning authority will take any action. In reality, with large shared HMOs, it has been suggested there is little they can do apart from bluff and intimidation, unless there has been unauthorised building work.

The approach the local planning authority is supposed to take when they discover unauthorised use is contradictory. The rules in PPG18 first state that the property owner should be encouraged to apply for planning permission. They then go on to say that if planning permission is likely to be granted then the local planning authority should not take enforcement action.

As stated in paragraph 17, annex A of circular 08/2010, although the control limit of six persons defines the scope of some planning classes, this does not imply that any excess of that number must constitute a breach of planning control. A material change of use will occur only where the total number of residents has increased to the point where it can be said that the use has intensified so as to become of a different character.

There are possibly about 100 student houses with more than six occupants. Some will have planning permission, but others have more than seven occupants. Therefore, assume that if City of York Council were to require these to be rented out to no more than six occupants this could create demand for (say) another 20 to 25 smaller student houses. In a time where the apparent intention is to control the number of student houses and given the doubt about the powers the council has, you have to wonder why this policy is being pursued.

York could do with objective planning policy rather than subjective politics.


This article was written in March 2012 and certain points may be superseded.


Summary of terms:

Circular 08/2010
Communities and Local Government Circular 08/2010 - Changes to planning regulations for dwellinghouses and houses in multiple occupation
UCO
Town and Country Planning (Use Classes) Order 1987 (SI 764/1987)



Constructive feedback on this information would be welcomed. If you have any comments please email admin@apyork.com giving details of your suggested corrections or additions and clearly stating your name and interest (eg tenant, landlord or planning advisor). Your comments will be considered when the article is next updated.