We recently caught up with Peter Baker, the Business Development Manager at UK Rooms for Rent, to talk about how changes to PD Rights may affect landlords. Here’s what he had to say…
“For the past decade, PD Rights have conveniently allowed us to convert a dwelling or flat to a HMO, generally without the need to obtain planning permission, subject to, of course, the usual variables such as number of proposed occupants and local authority licensing requirements.
As we all know, an Article 4 designation automatically removes those benefits provided under permitted development rights, meaning that a change of dwelling use from C3 (single let/family home) to C4 (HMO with 3-6 people) would require planning permission as standard. This is what we know, however what if this were to change? How would it affect investor Landlords?
Under new government plans, local authorities will be given the power to enforce mandatory planning permission for all HMO’s, regardless of size/occupancy or pre-Article 4 designation. Simply put, it’ll be illegal to operate a HMO without having planning permission in place. For existing HMO’s, I could only imagine that retrospective permission will be required. If so, this is a good time to ensure your properties are up to standard and meet the minimum requirements.
This major change to the industry is a positive step towards improving the quality of housing within the Private Rented Sector (PRS), some would say it’s about time too.
The financial implications for Landlords are clear: The cost of obtaining planning permission and the loss of PD Rights will increase costs, however better quality housing will see rents further increase across the board, increases that surpass previously reported annual projections. Naturally, fully compliant HMO’s will also benefit from healthy capital growth, which is never a bad thing!
Will these changes create an insurgency of Buy To Let properties to the market? I’m keen to know your thoughts.
As Lettings partners to Sourced Property, we’re here to give advice and guidance on the issues you’ll encounter during your property journey. Please do not hesitate to contact us via [email protected] to discover how we can help you.”
