January 2012 Update
Oxford City Council is the first council in the country to introduce a HMO licensing scheme that covers the whole of its area and requires every HMO to be licensed. The scheme came into force on 30 January 2012.
Milton Keynes Council and backed by Oxford City Council and Newcastle City Council have lost their judicial review seeking to overturn the changes to HMOs brought in last year. Read more.
April 2010 Regulations
A large concentration of Houses in Multiple Occupation (HMO) can have a significant and potentially damaging impact on the amenity of a local area, especially if too many properties are let to short term tenants with little stake in the local community. This can be of particular concern in areas with a large student population, number of migrant workers or in coastal areas. After years of campaigning by communities new regulations came into force in April 2010 (pdf) requiring planning permission to be obtained for all new HMOs.
However, concern by the coalition government that these regulations would "create unnecessary costs for landlords, which puts the supply of rented homes at risk", led to plans for a reversal of the regulations being announced on 17 June by Housing Minister, Grant Shapps.
The Changes
A short and informal consultation (pdf) with key interested parties took place between 17 June and 9 July on proposals (pdf) for amending the planning rules for HMOs. An announcement regarding the new regulations, largely unchanged from the proposals, followed on 7 September.
The ministerial announcement was accompanied by a letter from Steve Quartermain to Chief Planning Officers clarifying that "changes of use from family houses to small HMOs will be able to happen freely without the need for planning applications. Where there is a local need to control the spread of HMOs local authorities will be able to use existing powers, in the form of article 4 directions, to require planning applications in their area."
Two statutory instruments giving effect to the changes have been laid before Parliament.
The changes came into effect on 1 October 2010.
New guidance published by CLG
A month after the changes, CLG published "Circular 08/10: changes to planning regulations for dwellinghouses and houses in multiple occupation". It is accompanied by a replacement Appendix D of Circular 9/95 relating to article 4 directions, which allow local planning authorities to withdraw permitted development rights in certain circumstances.
SI Committee debate HMO orders
A Statutory Instrument Committee of cross party MPs debated the Early Day Motions 729 and 730 on the HMO orders on 16 November. Leading roles were taken by Dr Alan Whitehead (Southampton Test) and the Minister for Housing. The Instruments were opposed by the five Labour members of the Committee. They were supported by seven of the Conservatives, and by both Liberal Democrats, so the new legislation remained in place. Grant Shapps was due to meet with MPs opposed to the changes to HMO regulations in November.
Introduction of Article 4 Directions
An informally given update on Article 4 Directions was reported to the RTPI on 17 September. It said:
In respect of councils using Article 4 Directions to limit further HMO development in designated areas, the Minister has advised that the consent of the Secretary of State will not be required.
Most importantly the Minister is also advising that councils with policies already limiting HMO development in parts of their locality, can bring in Article 4 Directions straightaway, without notice, to coincide with the national policy change.
Although the notice period would not be given, it is the Minister's view that for councils that already have policies in place which clearly state where they stand on further HMO development, landlords already know their position - so a 1 October Article 4 Direction would not constitute a new policy unknown to potential applicants, and in the Ministers' opinion would carry little risk (RTPI emphasis) of successful challenge.
The following clarification was issued by CLG on 28 September.
"It does not matter whether a local authority has an existing policy restricting HMO development or not for the purposes of compensation liability. Under the planning system there is a general principle that once permission has been granted, either by a specific grant of planning permission or by means of a development order, the right to develop is guaranteed and can only be withdrawn upon payment of compensation. It is that principle that is being adhered to here. Local authorities will, therefore, be liable to pay compensation in all instances where Article 4 Directions are made with less than 12 months notice.
However, it may be that where a local authority has had a clear policy limiting HMOs in place for some time there are likely to be fewer planning applications and so the number of compensation claims is likely to be reduced."
Milton Keynes judicial review
Milton Keynes Council made a request for a judicial review into the new regulations for HMOs and an application for an interim injunction to the High Court on 29 September, with the support of Leeds City Council and a number of other university and seaside towns. The request was adjourned, meaning that the regulations came into force as planned on 1 October. However, there was found to be sufficient merit in the case to require the Government to enter a defence to all matters raised by 8 October.
The application for a review was refused, the reasons given were:
- the defendant was entitled to rely on the consultation exercise conducted in May 2009, which set out the 3 options the defendant was considering. Accordingly the defendant was under no obligation to reconsult;
- the impact assessment demonstrates that the financial impact on local authorities, such as the claimants was considered;
- it is not for the courts to impose additional procedural safeguards when the primary legislation establishes the means by which the statutory instrument is to be scrutinized by parliament;
- a high level political agreement cannot give rise to a legitimate expectation enforceable in public law proceedings;
- there is no error of law.
Milton Keynes Council and backed by Oxford City Council and Newcastle City Council have lost their judicial review seeking to overturn the changes to HMOs brought in last year. The councils had argued that the Government had failed to properly consult local planning authorities prior to the changes, and therefore denied Councils and communities suffering from the impacts of HMOs an opportunity to have their voices heard.
Milton Keynes Council cabinet member for planning Mike Galloway said: "We lost the case because the judge considered that whilst the consultation carried out by the Department for Communities and Local Government was unfair to planning authorities it was not so unfair that it was unlawful."
Planning fees
One of the costs to councils of using Article 4 Directions to control HMO conversions is that planning applications are free under an Article 4. This may act as a discouragement to local authorities to implement Article 4 Directions if they have to fund the cost of the applications which arise. A consultation on "Proposals for changes to planning application fees in England" has taken place, which the RTPI responded to. It proposes to give councils the power to set their own fees and offers an opportunity to extend the range of fees charged - including to Article 4 Directions.
Industry response
The RTPI response to the July 2010 consultation said, the Institute completely supports the principles behind the current proposals We are however concerned that the proposals effectively the blanket removal of councils ability to manage controversial developments in their own areas will in practice have the opposite effect.
The RTPI-CIH Planning for Housing Network met to discuss the proposals in detail, where concern was expressed about the rigidity of Article 4 Directions in comparison to the fluid nature of HMOs.
Full Notes of the meeting are available to Network members (free to join).
The Planning Officers Society also responded to the consultation, saying that the current (April 2010) planning regime regarding HMOs is the best way to control the spread of HMOs.
The Residential Landlords Association have set out their case against the introduction of Article 4 Directions by local authorities, urging them to address problems using existing legislation.
Suggested practice advice
Research published by CLG in 2008 "Evidence Gathering: Housing in Multiple Occupation and Possible Planning Responses", gives a useful insight into the issues and possible responses to high concentrations of student HMOs, pre-April 2010 changes.
The National HMO Lobby website gives details of local planning policies and plans that have been developed by local authorities to control the concentration of HMOs in a particular area.
- An Article 4 Direction would still require planning policies to be in place to support and justify the removal of permitted development rights;
- Proactive partnership working, with the formation of working groups or forums with representation from all key stakeholders is important in addressing the issues surrounding high concentrations of HMOs;
- A Houses in Multiple Occupation Subject Plan for the Belfast City Council Area was developed to influence and shape the market for HMOs positively, rather than simply controlling further development in areas of high HMO concentration. It seeks a wider distribution of HMO accommodation across the city, with the aim of creating balanced communities;
- Some higher education institutions have taken responsibility for producing their own housing and accommodation strategies to complement those produced by local authorities. More institutions could be encouraged to take this approach;
- Anarea of restraint policyidentifies and designates an area whereby restraints are placed on certain forms of development. E.g. the Leeds Area of Housing Mix places a restraint on various forms of student housing;
- Athreshold policy uses a ceiling approach to restrict HMOs. The ceiling is generally set at 5-10 percent for the proportion of HMOs in a neighbourhood;
- Threshold policies which take into account the different characters of areas could be used and easier to justify. For example, it may be that the areas near to a city centre have a higher threshold than areas further out;
- Apurpose built accommodation policy has been used by some local authorities working in partnership with higher education institutions to designate and promote the development of purpose built accommodation for students. Usually located close to university facilities, as part of a wider regeneration initiative they aim to draw students out of the private rented sector;
- Charnwood Borough Council has produced an SPD, which provides a local policy response based on the adopted policies of the local plan. This includes an encouragement to develop purpose built student accommodation within the expanded town centre where residential numbers are low and commercial uses predominate;
- Non-specific policies mean that each application can be determined on its own merits, however this can cause problems for elected members in deciding what is an unacceptable concentration, or even how to define the area;
- The policies and mechanisms developed to address high concentrations of HMOs must be tailored to local circumstances;
- Local authorities and communities need to recognise that addressing the issues surrounding HMOs through the planning system is only part of the answer;
- The Residential Landlords Association has launched an accreditation scheme which creates a new partnership between local authorities and responsible landlords who are committed to raising professional standards and providing good quality accommodation.
RTPI networking event - resources
The RTPI held a networking event in December 2010 where representatives from local authorities facing problems with high concentrations of HMOs met to share their experiences and their way forward in implementing Article 4 Directions and introducing new policies.
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