September 2021 Newsletter
With the holiday season behind us, freedom day, the end of the stamp duty holiday, end of furlough, and the eviction ban notice period returning to normal (not for commercial) it seems that we have not exited the Covid Tunnel but rather exploded out of it.
The desire for Investments has never been as strong. The North of England especially Hull and Humber have been earmarked as one of the best places to invest. The demand for good rental properties has never been stronger.
In England there are 4.7m properties rented by private landlords. At the end of August there were nationally 168,634 on the market an average of 3.6%. In the North East, Yorkshire and the Humber we have an even lower percentage of available properties at just 2.5%. This demand increases rents and in turn places Hull as one of the most desirable places to invest.
Environmental Housing & H.M.O.
We are asked daily to explain the difference between a H.M.O, Licensed H.M.O.s and ‘The Article 4 Directive’. I have tried to explain as simply as possible in this newsletter. If you are still confused or simply want us to clarify your position don't hesitate to contact a member of the team for a free of charge consultation.
Is your property an HMO?
Definitions of the different types of HMO
It is very important to be clear about whether a property is a HMO by definition in law. A common misconception is that if a property does not meet the definition of a Mandatory Licensing it is not an HMO. This is incorrect and a number of regulations with serious penalties apply to ALL HMOs.
Please see the following definitions;
The standard definition of an HMO – If a property is occupied by 3 or more people forming two or more households and sharing facilities. I.e. A 2 bed property with a couple renting a room with an individual renting another room would be an HMO.
The current definition for Mandatory Licensing is any property with 5 or more occupants, forming at least two household sharing Living/bathroom/kitchen/dining facilities.
Some blocks of self-contained flats are classed as HMOs under S257 of the Housing Act 2004, due to the date of conversion;
An individual self-contained flat can be an HMO if it meets the standard definition or that of Mandatory Licensing;
Exemptions – A property occupied by only two individuals, owner occupiers with up to two lodgers; properties managed by local authority, registered social landlord properties, police, health or fire and rescue services, certain student halls of residence and some religious buildings;
Type of occupation affecting HMOs
It is important to make a distinction between the “cohesive” or “non-cohesive” occupation of an HMO. The type of occupation will dictate differing standards for fire safety, room sizes, maximum occupation and level of amenities to ensure the safety and well-being of tenants. E.g. Non-cohesive HMOs require a much higher standard of fire precautions than a cohesive HMO.
Cohesive HMO – Makes consideration to the social group i.e. students often come as a pre-formed group and more likely to act as one group;
Non-cohesive/bedsit HMO – Individuals renting a rooms on individual tenancies;
HMO Management Regulations – Place duties on the “manager” of an HMO
Licensing and Management of Houses in Multiple Occupation (additional provisions) 2007 – Apply to s257 HMO blocks of flats and traditional HMOs.
The Management of Houses in Multiple Occupation Regulations 2006 – Apply to cohesive and non-cohesive shared house HMOs.
The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 - Details minimum bedroom sizes of no less than 6.51m² for a person aged over 10 years, not less than 10.22m² two persons aged over 10 years; and not less than 4.64m² for one person aged under 10 years.
The manager of an HMO must ensure that the Regulations are complied with and this covers many things, including the requirement for electrical safety checks every 5 years, gas safety, ensuring the fire precautions are maintained and maintaining communal areas and gardens.
Article 4 directive affecting creation of HMOs
On the 9th October 2013 an Article 4 planning directive was introduced by Hull City Council to restrict the creation of HMOs within a certain area in the city. Further areas were introduced into the directive on the 9th August 2019.
The directive removed permitted development rights to create an HMO of any kind and planning permission will be required to change use from C3 to C4. Existing HMOs may be exempt from this rule where historic use can be proved. A map for the areas of the City affected, along with other information can be found on the Hull City Council website by clicking here. It is important to take advice and guidance from the authority or planning consultant before taking action. A full list of areas adopted into the Article 4 period can be found at https://www.tulipestateagen ts.co.uk/hmo-advice.
Planning and C.L.U.
1.) Single dwelling use planning classification is C3, H.M.O. status is C4.
2.) A Certificate of Lawful Use(C.L.U) refers to planning approval class C4
3.) Having a H.M.O. License does not mean that you can operate a H.M.O..if in an Article 4 area you also need planning.
4.) Having planning permission C4 does not mean that you can operate a H.M.O. that requires a license.
5.) Planning is a completely separate issue, different rules and conditions apply, a property in an Article 4 directive area must have C4 use or prove continuous use as a H.M.O. since that area became part of the Article 4 directive.
6.) Any property with six tenants creating more than two households requires planning permission regardless as to whether it is in an Article 4 directive area or not.
7.) You can claim permitted rights by demonstrating that the property has been used as a HMO since the start date of the Article 4 in your area.
8.) Article 4 Directive Areas and adoption dates.
a.) Avenues, Pearson Park, Newland, Inglemire and Beverley Road, (9th October 2013).
b.) Spring Bank and Beverley Road South, (9th August 2019).
c.) Newington and St Andrews, (9th August 2019).
d.) Holderness Road Corridor, (9th August 2019).
All maps and planning notices can be found on our website: https://www.tulipesta teagents.co.uk/hmo-advice
In conclusion, having a HMO license does not give the owner the right to use a property as a H.M.O. in an Article 4 directive area. Planning permission (C4) or permitted rights are also required.
C.L.U. (Certificate of Lawful Use).
Although not essential to apply to have C4 use it is becoming increasingly difficult to prove continuous use.
We recommend to all our clients that they apply for C4 permission. Once approved you will be issued with a C.L.U. Unlike a H.M.O. license which relates to the property, is in the operator’s name and is non-transferable a C.L.U. stays with the property indefinitely.
We along with a planning consultant are currently in talks with the Council to establish a flexible approach. It is proposed that a property that has planning permission C4 can be used either as a HMO or single dwelling without losing the right to use it as a HMO for 10 years. At the end of the 10 year period whichever classification is in use determines it's future use / status.
How can Tulip help?
1.) Apply for C4 use planning permission on your behalf.
a.) Meet with a planning consultant at the property.
b.) Collate and provide all the relevant documentation required.
c.) Assist with the application and submit on your behalf.
d.) Pay the planning fee through the planning portal.
2.) We can apply for a H.M.O. license.
a.) Site meeting with Environmental Housing officer.
b.) Prepare CAD drawing for the application.
c.) Complete the application form and submit it on the Council portal.
d.) Pay the fees on your behalf initially the fit and proper person fee and subsequently the full fee on submission.
3.) Tulip keeps electronic copies of all A.S.T.s for properties we manage and will free of charge provide copies in order to assist in proving permitted rights.
Increasingly the financial institutions are asking for C.L.U. Whether you are selling, refinancing or simply wanting to carry on renting, getting planning permission makes sound commercial sense.
For a quotation for either C.L.U. application or H.M.O. license application please email: contact@tulipestateagen ts.co.uk
Tulip Investment Sales
Tulip sells Investment properties of all types and by no means does the lack of a C.L.U. mean we will not sell your property. In our experience properties with all the correct paperwork sell easier and achieve a higher price.
The demand for Investment properties has never been higher. If you would like to talk to a sales advisor please email: sales@tulipestateagents .co.uk.
Recruitment
Due to our ongoing growth Tulip are recruiting in all areas looking for an experienced Sales Negotiator, Letting Manager. Interested please send a CV to contact@tulipestateagents.c o.uk.
Employee of the Month
We would like to congratulate Karolina as Tulip Employee of the month August receiving flowers, a bottle of fizz and £100 bonus. Throughout the holiday period and with half the team either infected with Covid or isolating Karolina has worked six days and filled in in every department without complaint.
For more information of services please see:
https://www.tulipestateagents. co.uk/landlords
J. R Austin and the Team
