A law unto themselves
Just before the weekend commenced, we received a response to a request for a lawful development certificate. The request was to turn a house into a 6 bedroom HMO.
This is not something which requires planning. Indeed, we have converted many houses using the same criterion.
An HMO is classed as C4, this class was created on 6th April 2010. One is allowed to change a single dwelling into a dwelling which shares some amenities, without the need for planning.
This is not based on the local council or residents’ opinions, this is a policy or allowance laid down by central government.
The only way a council can exempt themselves from this legislation is if they apply for an Article 4, which allows them to be excluded.
There is nothing to apply for to use this legislation, you simply do the work, comply with all the legislation and then apply for a licence.
This seems a little unintuitive, and back to front, but this is the way it works.
We have followed the same process in Westminster, Kensington & Chelsea and Brent.
However, on this occasion we had previously applied for a 9 bed HMO, which does require planning. This almost started a trade union campaign amongst the local residents, and it was batted well out of the park, despite one round of revisions according to the planning officer’s recommendations.
Hence, the next step was to use Permitted Development to obtain a 6 room HMO, which as explained does not require any formal planning permissions.
Many planning consultants had advised that there was no need to even seek or request permission. However, given the history and to err on the side of prudence, I took the decision to apply for a lawful development certificate.
This was done to give certainty to the works prior to commencement, even though it was not required. Given the prior opposition I wanted to ensure there was no hidden technicality which could come out of the woodwork.
Even though the council have recommended it for approval it has been called in for committee approval. If they do not approve the certificate, we are confident it will be approved in appeal, and this will cost the council more money. Therefore, hopefully at some point someone will look at the issue rationally and make the right decision; although, I will not be holding my breath!
This is a very powerful piece of legislation if you’re an investor; it can be used to greatly enhance your rental yield. On a recent property we managed to enhance the rental from £1,800pm to £4,000pm. This is 220% higher, this means the property will produce the equivalent of a wage for you. There is plenty of lending available for HMOs, previously your options would have been limited; currently the rates are very low as well. We are in the process of refinancing a newly developed HMO for 3.19% fixed for 5 years.
It’s definitely a strategy worth considering if you own a freehold property.