How Article 4 Directions Are Shaping the Future of HMOs

The demand for shared housing continues to grow. Houses in Multiple Occupation, also known as “HMOs”, typically offer affordable and flexible living options for students, young professionals and low-income tenants. However, while HMOs help meet housing needs, they also come with challenges for local communities and local authorities. Over the past decade or so, councils have used a planning tool known as Article 4 Directions to gain more control over local HMO density. These rules are now having a significant impact on HMO landlords.

Understanding how Article 4 Directions work is important for anyone considering converting a property into an HMO or investing in this type of shared housing. These local planning rules determine whether a property can be used as an HMO even if it meets all the licensing conditions. For many landlords, this has meant rethinking renovation plans, along with navigating new planning processes and adjusting to the changing landscape of shared housing.  

What Is an HMO and Why Is It Popular?

An HMO is a type of property which is inhabited by at least three tenants who are from more than one household and who share some common facilities, such as a kitchen, bathroom or living room. This type of housing is common in cities and university towns where demand for relatively low-cost rental spaces is high. HMOs enable landlords to generate additional income from a single property by renting out individual rooms, while tenants benefit from relatively lower rents in shared properties.

Over the years, HMOs have become an important part of the housing landscape. They help solve shortages in housing and offer a stepping stone for people saving for their first home. However, when too many HMOs are concentrated in one area, they can change the character of the locality. For example, they can lead to an increase in demand for local amenities such as parking spaces and refuse disposal services.  These types of issue can lead to complaints and put pressure on local communities and local authorities. This has led to councils stepping in to manage the growth of HMO conversions more carefully.

Understanding Article 4 Directions

Article 4 Directions are planning regulations used by local authorities to remove certain permitted development rights. Under normal circumstances, landlords can convert a property into a “small” HMO compliant with building regulations without having to apply for and obtain planning permission. This is possible under permitted development rules. However, when an Article 4 Direction is in place, landlords must apply for planning permission even for small HMOs.

The primary objective of Article 4 Direction is to preserve the character of residential neighbourhoods. It enables councils to regulate the number and location of HMOs within a local area. For example, if a street has seen many homes already converted into shared housing, a council might introduce Article 4 Directions to prevent further conversions without approval. This helps councils strike a balance between facilitating enough shared housing and maintaining quality of life for local residents.

How Article 4 Affects Property Renovation Plans

When a landlord plans to convert a home into a small HMO, renovating the property is usually the first step. This can involve adding fire doors, installing extra bathrooms, improving insulation and creating individual bedrooms. But in an Article 4 area, the first task becomes applying for planning permission, without which the renovation cannot proceed.

Planning permission can be denied if the council believes that the area already has enough HMOs and the proposed changes would have a negative local impact. This possibility has led some landlords to reconsider starting expensive renovation projects. They now need to factor in the delays involved in the planning process and the risk of rejection. For investors, this means being more strategic about where they buy and how they visualise their renovation plans.

Applying for a Licensed HMO in Article 4 Areas

Even with planning permission, a landlord must still apply for an HMO licence if the property meets specific criteria. A licensed HMO is one that meets minimum safety and quality standards set by the council. For example, this includes having the correct number of bathrooms, gas and electrical safety, smoke and carbon monoxide alarms, fire protection, including fire doors, fire extinguishers and marked fire exits, and proper waste disposal arrangements. The licensing system ensures that shared housing is safe and suitable for tenants.

In Article 4 areas, both planning permission and an HMO licence are needed. These are two separate processes that must be completed before tenants can move in. This can be confusing for new landlords who assume that one approval covers everything. Failing to get either can lead to enforcement action. This can include fines and orders to return the property to single-family use.

Landlords vs. Local Communities

The debate around Article 4 often comes down to a clash of interests. Landlords and property investors view HMOs as a viable means of meeting housing demand and expanding their portfolios. They argue that Article 4 creates barriers, adds red tape and drives up the cost of providing shared housing. They believe the market should decide where and how HMOs are developed, not planning policy.

On the other hand, many local communities believe that an excessive number of HMOs negatively impact the quality of life in their neighbourhoods. They point to rising noise levels, parking problems and changing community dynamics. These residents welcome Article 4 Directions as a way of protecting family homes and maintaining a sensible balance in the area. Such contrasting opinions continues to shape how Article 4 is used and whether new changes to the rules are introduced in future.

Conclusion

Article 4 Directions are playing a significant role in shaping the future of HMOs. By removing automatic development rights, councils can control where shared housing is created and how it fits in with the local community. While this creates challenges for landlords and investors, it also provides an opportunity to improve housing standards and maintain balanced neighbourhoods. For anyone involved in HMO housing, whether as an investor, landlord or tenant, understanding Article 4 is important. It affects planning decisions, renovation projects and licensing requirements. As the use of Article 4 continues to grow, staying informed and working closely with local councils will be key to success.

FAQs

Q. What is an Article 4 Direction?

A. An Article 4 Direction is a planning rule used by local councils to remove certain automatic development rights. When it is applicable, landlords must apply for planning permission before converting a property into a shared house.

Q. How does Article 4 affect HMOs?

A. It changes the process of converting homes into HMOs. Landlords must apply for planning permission and may be refused if the council believes there are too many HMOs in a particular area.

Q. Do you still need an HMO licence if you have planning permission?

A. Yes. Planning permission and licensing are separate. You must have both if the property meets the criteria for a licensed HMO.

Q. Can Article 4 Directions stop you from renovating a property?

A. They can delay or stop conversion projects if planning permission is denied. You should never start renovations without planning approval in an Article 4 area.

Q. What should investors look for when buying a potential HMO?

A. Check if the property is in an Article 4 area. Review local council policies and consult with planning officers before making a purchase or commencing a conversion.