Lead Forensics
Prettys Solicitors Ipswich


Thinking of investing in a property to let as a House in Multiple Occupation?

A house in multiple occupation (HMO) often provides a higher yield than that achievable through letting a larger home as a single dwellinghouse.

The legal definition of an HMO is set out in the Housing Act 2004 and the main elements are that an HMO is a house or a flat with three or more tenants who form two or more households and share a bathroom, kitchen or toilet and introduced licensing requirements for larger HMOs.

The change of use of a property from a class C3 (dwellinghouse) to a class C4 (HMO) is likely to be a material change of use requiring planning permission.

However, deemed planning permission is granted for such a change of use by class L(b) of Part 3 (changes of use) of Schedule 2 to the GPDO 2015.

However, this permitted development right may be removed by a Local Authority making an Article 4 direction (article 4, GPDO 2015), in which case, express planning permission will be required from the local planning authority (LPA). The existence of an Article 4 direction should be revealed by a local land charges search.

In areas where there is already a high concentration of HMOs, such as university towns, Article 4 directions will be more common.

The change of use from a class C3 (dwellinghouse) to a large HMO (sui generis) is likely to be a material change of use requiring express planning permission from the Local Planning Authority  

The requirements for planning permission and for licensing under the HA 2004 are completely separate. A property may require planning permission but no licence or vice versa.

A licence is currently mandatory for HMOs with three or more storeys and occupied by five or more persons who together do not form a single household. It should be noted that the fact that an HMO has a licence under the HA 2004 does not mean that planning permission will be granted for a change of use.

The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 (2018/221) (LHMO 2018) also comes into force on 1 October 2018. It applies to England only and will extend the scope of mandatory licensing by removing the reference to the number of storeys so that it applies to all HMOs occupied by 5 or more people forming more than one house regardless of number of storeys.

For more information on buying an HMO contact commprop@prettys.co.uk

The above article is published for guidance only and does not constitute specific legal advice.

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