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.