Understanding Article 4 Direction
Is Student Property A Good Investment?
Under current planning regulations, a normal residential dwelling is classed as C3 whereas an HMO is classed as C4. Up until 2010, ‘Permitted Development Rights’ meant that a house could be converted to an HMO (from C3 to C4) without the need for planning permission. Since 2010, however, local councils have been given the power to remove permitted development rights through a clause known as Article 4 Direction. In other words, councils now have the right to insist that planning permission is granted before a residential house is converted into an HMO.
The purpose of the Article 4 Direction clause is to give councils the power to control the spread and density of HMOs in line with their local housing strategies. As a result, councils use Article 4 in different ways across different areas, so if you are considering purchasing an HMO or converting a house into an HMO, it is vital that you understand how the Article 4 planning restrictions apply in the area concerned.
It’s also crucial to understand that in designated Article 4 areas, councils very rarely grant planning permission for the creation of new HMOs. Before purchasing a house for conversion to an HMO it’s essential to verify that it’s likely to be granted planning permission by the local council (e.g. if it’s not in a designated Article 4 area).
Before purchasing an existing HMO, it’s still vital to check it’s Article 4 status. If it has been used continuously and exclusively as an HMO since before the local council instituted Article 4 Direction, then the HMO has proper C4 planning status. This needs to be proven, however, for example, by an unbroken series of tenancy agreements covering the period in question.
Where there is some doubt about C4 status of an existing HMO, or where there is some vital paperwork missing (e.g. some tenancy agreements), a planning document called a Certificate of Lawful Use (also known as a Lawful Development Certificate) will need to be obtained from the local council to prove that the existing use of the property as an HMO is lawful. Many lenders insist on this document being obtained, even if all other forms of documented proof can be produced.
So in summary, if you are considering buying a property, either as an existing HMO or with a view to converting it into one, you need to ensure that you understand how the above laws and regulations apply so that you’re not left with a property unfit for purpose.
How Can accumul8 Help You?
“New to the world of HMO investment, I could not have asked for a better team to help me navigate through sourcing, purchasing, refurbishment, renovations and letting. The trio partnership of Accumul8, Renov8 and Loc8me is a dream team. As a remote investor this has taken the stress out of venturing into this market. Always at hand when you need advice, Beth is always prompt and efficient in dealing with matters and getting back to you. Professional, polite and courteous at all times.”
“Dealing with Mike has been a breath of fresh air. Accumul8 know the market inside out, are enthusiastic, honest and have always delivered on promises. It’s never easy being a long way from a property but I am more than happy with those guys involved. They sold one property for exactly what we wanted and has sourced a builder to work on our other one which has produced a letting at a higher price than before, in the space of 3 weeks. I couldn’t be happier or more confident in what is being done on our behalf.”
“Mike Hughes provided outstanding service in the sale of our property in Lincoln. He went way beyond the duties normally expected of an agent and proactively anticipated and dealt with issues that would be raised. Mike has very good contacts with the local authority, which allowed difficulties to be resolved and at every stage he communicated most effectively with everyone. His professionalism is an example to others and I can strongly recommend him to whoever would benefit from his services.”
“I’ve worked with Mike on multiple properties – their service is simply first class. I’m always impressed by their expertise and their proactive approach. I would have no hesitation in recommending them to anyone looking for an invaluable partner in property.”
Founder of Horton’s Estate Agents
“The team at accumul8 and loc8me look after us extremely well. They’ve helped us build and manage a substantial portfolio over the last few years. We’re very grateful to Mike for his commitment to every aspect of every deal that he sources for us and look forward to doing business together for many more years to come.”
“Working with the team at accumul8 helped me expand into three new target cities within a 12 month period and add 120 beds to my student property portfolio. This would have been impossible without their sound advice, ability to source assets at speed, and capacity to undertake and manage two large refurbishment projects. Each acquisition and renovation project came with it’s own challenges which Mike and the team walked me through. As an investment professional myself, I can wholly recommend accumul8 to investors looking for a highly effective and client focussed service.”
“I contacted the team at accumul8 with some general questions surrounding HMO property – I wasn’t sure whether it was the right investment for me. Through their informative communication and proven track record, they gave me the necessary confidence in the student market. By only bringing properties tailored to my investment profile, they clearly listened to my requirements and since initial contact, I have purchased my first HMO through them and am about to complete on a further two.”
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