Buy-to-Let investors wishing to purchase an investment property in Sheffield should read this IMPORTANT EDITIORIAL first about Article 4 before making an offer to purchase a property.
Many Buy-to-Let investors throughout the UK are starting to see the true potential that Sheffield has on offer. Comparatively lower house prices than in the south east and high demand for good quality accommodation makes Sheffield a highly attractive city for property investors.
The University of Sheffield, Sheffield Hallam University, Royal Hallamshire & Northern General Hospitals attract people from different parts of the UK and all over the world who come to Sheffield to study and start their promising careers for life. It’s little wonder why investors see the opportunity to invest in this great city and offer quality housing for thousands of tenants.
It is estimated that there are currently in excess of 50,000 students studying in Sheffield, many of whom live in non-university owned accommodation. This places pressure on private housing raising concerns relating to the effects of concentrations of student housing on communities. Issues have been raised in these areas which have included; anti-social behaviour, parking problems, poor management of housing stock, balance of communities and the loss of population outside term time.
Local Councils around the UK have sought to manage the pressure points in selected areas with the introduction of Article 4 Directions.
What is Article 4?
An Article 4 Direction is a means by which a local planning authority can bring within planning control certain types of development, or changes of use, which would normally be permitted development (i.e. not require an application for planning permission).
This means that within the Article 4 area, you need to apply for planning permission to convert a dwelling house (Use class C3) into an HMO for 3 to 6 unrelated people (Use class C4). If your property is outside this area, you don’t need to apply for planning permission to convert a dwelling house into a 3 to 6 person HMO. Planning permission is normally required in any part of the city for HMO properties shared by 7 or more persons or conversions to any sized HMO from any other use class.
Click here to read our article on What Investors Need to Know About HMO properties.
Click here to view a map of the Article 4 Area in Sheffield and see whether your property is affected.
What does this mean for people living in Sheffield?
Owners of residential properties within the Article 4 area who wish to use them for Houses in Multiple Occupation (Class C4) need to apply for planning permission to do so. This means that the impact of new shared housing in areas where there are already high concentrations, can be considered, and controlled if necessary.
The main objective of the Article 4 Direction is to ensure that where opportunities arise, development can be prevented (through control of planning permission), which might contribute to communities becoming unsustainable as a result of a concentration of shared housing.
Department for Communities and Local Government Circular 08/2010 highlights that “a high concentration of shared homes can sometimes cause problems, especially if too many properties in one area are let to short term tenants with little stake in the local community”. This is why legislation has been put in place to allow local authorities to control high concentrations where there is a problem.
Are you thinking about buying a house to rent in an Article 4 area?
We speak to prospective buyers on a daily basis who are looking to continue renting a property as a HMO.
Here are a few things to be aware of:
- Some local authorities will ask for proof of up to 10 years of established use as an HMO in order to avoid an Article 4 Direction. This can be achieved by supplying copies of Tenancy Agreements since December 2011. The vendor of the property should be able to provide this information. You could make the purchase of the property conditional upon receiving satisfactory evidence that the property has been continuously rented as an HMO for this period of time. NOTE: an established HMO could be refused permission when the landlord cannot prove established use for the required time.
- If a property, that has established use as an HMO, changes use to a family home this will break the established use and will need planning consent to be used as an HMO again in future. There is a real risk that it may not be possible to acquire consent to HMO use due to the current concentration of HMO properties in the area.
- If you are considering buying a property, for conversion in an established student area, check the local authority web site to see if there are any plans to put an Article 4 Direction in the area.
- If lenders become aware that there is an Article 4 Direction in place in an area where you are planning to buy for conversion to an HMO, they may refuse to lend on that property.
Help Is At Hand
At Nicholas Humphreys (Sheffield – Broomhill & Crookes), we help property owners and potential buyers in all matters starting from HMO Application & Compliance through to selling HMO properties and assisting vendors prepare the necessary paperwork to help buyers comply with Article 4 Directives.
Call us on 0114 470 4715 and we will be happy to help you further. Our office is open 7 DAYS A WEEK from 8AM to 8PM.