2 Minute Read
Introduction
The reason I am writing about Article 4 Direction is because is it an incredibly important topic of discussion when taking on a new property to rent out for a landlord, and also because you would be amazed at the number of puzzled faces I am met with when I ask landlords enquiring about our services, if their property needs or has Article 4 planning permission.
In this post I will define ‘Article 4 Direction’, show an example of how it relates to rental properties in Leeds, and provide some best practices to ensure you, as a landlord, are operating within the law.
What is Article 4 Direction?
Article 4 Direction removes permitted development rights to change the use of a property from a Class C3 (dwelling-house) into a Class C4 (House of Multiple Occupation) within a specified area, as outlined by the Local Planning Authority. In other words, you can’t buy a family house and rent it to more than two unrelated individuals, without permission.
Why is Article 4 Direction Important?
So what’s the point of it? Well, it does serve a good purpose, and that is to ensure there is an even balance of housing within a specific area. For example, those of you that know the Headingley and Hyde Park areas of Leeds will know how densely populated they are by students and large HMO’s, with very few family houses in sight.
In fact, at one point there were three schools serving Headingley and the families that lived there. Since the rapid increase of landlord owned houses over the last couple of decades, there is now only one school left in the area, for as families cashed in on selling their houses at inflated prices to investors, and students moved into the area to fill those houses, the demand for schools was no more.
Since then, there have been many campaign groups in Headingley pushing for a balance in housing, so the Article 4 Direction will be music to their ears.
The Article 4 Direction has been put into place to ensure that no more Class C4 HMO houses are developed by landlords and that as many family houses remain as possible in an attempt to bring back some balance to these areas. You know, kids playing outside and neighbours nattering over garden fences, rather than crumbling garden walls around overgrown gardens and student parties overflowing onto the street in the early hours of the morning.
Unfortunately for property developers and investors, the Article 4 Direction covers a much larger area than just Headingley and Hyde Park as you will see from the map here.
Whilst some people believe Article 4 Direction is a step in the right direction, there are definitely those whom oppose it. For example, there are those who believe it will displace groups such as students from areas close to universities and force them into other areas occupied by Housing Association tenants and low income households leading to unnecessary pressure on the housing stock in such areas.
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What if I don’t have Article 4 Planning Permission?
If you own a family house that has no history of renting to more than two individual, unrelated tenants, or you are buying a property that does not have evidence of renting to more than two individual, unrelated tenants, then the law simply states you are unable to do so unless you apply for planning permission for change of use.
If you are unsure then I would definitely recommend contacting the council to gain their advice and expertise.
You can contact them anonymously if you wish and I can tell you they will be more than happy to talk over the situation for you and advise you of your best plan of action.
If you would rather not talk to someone in the council then they have a very good website where you can find out if you need planning permission, online.
Example of Breaching Article 4 Direction
A first time buy-to-let landlord approached us last year as he had recently purchased a 3 bedroom semi-detached house in central Headingley, from a family that had lived there for many years. Following an extensive refurbishment to a very high standard, which also included adding a fourth bedroom, the landlord invited us out to carry out a rental valuation, with the aim of renting it out to four individual students.
As our valuation staff are trained to follow a procedure of questions prior to looking around the property, it soon became apparent that the landlord had not approached Leeds City Council to acquire the correct Article 4 Planning Permission, prior to investing a large sum of money into the property.
We had no choice but to carry out the valuation on the premise that we could only let and manage the property to four tenants once he could provide the correct documentation. Of course, we pointed him in the right direction and educated him on how to go about applying for permission through Leeds City Council.
After a few months of keeping in contact, the Landlord informed us that Leeds City Council had denied him the needed planning permission to change the use of the property from a Class C3 (dwelling-house) into a Class C4 (House of Multiple Occupation).
This was a massive blow for the landlord, as not only had he spent much time and money on the project, but now his return on investment could only be a fraction of what he had planned for, by renting it out to a family or two individual sharers.
Had he approached us prior to taking on the project we would have informed him of the huge number of regulations and legislation a landlord needs to adhere to, including the Article 4 Direction.
Conclusion
As a landlord or investor, whether you are for it or against it, the Article 4 Direction is around for a reason, and if you are looking to purchase a property for the purpose of development and you are at all unsure whether or not you will need planning permission under the Article 4 Direction, simply get in contact so we may advise you correctly on your next steps.
It’s a call that could save you a huge amount of time and money in the long run.
Any Questions?
Matt Williams – Director
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