Rental sector must heed HMO licensing changes
Wednesday, October 26, 2011
ARLA warns of potentially costly implications for landlords in cities and student towns
The Association of Residential Letting Agents (ARLA) is today urging landlords to be aware of forthcoming
changes to the categorisation and regulation of rental properties.
Many local authorities have indicated they wish to enforce Article 4 - a piece of legislation which means
planning permission will be required if a property is being changed from a dwelling house (Class C3) to a House in
Multiple Occupation (a 'small HMO' - Class C4).
Previously, HMO licenses only applied to homes with six or more unrelated tenants living in one property with
shared amenities such as a bathroom and kitchen over three levels; however in April 2010 the new Class C4 was
introduced, covering any rental home with three to six unrelated tenants, who share common facilities.
As Article 4 is optional it may not be implemented by all local authorities, but according to ARLA it is more
likely to be enforced in areas with a high density of smaller and larger HMO properties - for example in city
centres or where there are student communities. Therefore ARLA is advising landlords to check with their local
authority or a licensed ARLA agent before altering a property to accommodate an increased number of tenants or
purchasing such a property for investment.
Ian Potter, Operations Manager at ARLA, said: "HMO licensing and planning applications are not a new issue for
landlords, but now there is the added complication of Article 4. There is no room for complacency - failure to
comply could result in a hefty fine.
"It is therefore important for any landlord considering changing the use of a property to fully research the
regulations in their area. For landlords with portfolios spanning more than one local authority area, this may mean
different rules apply for each property. Factoring in the possible additional costs of purchasing the licence is
Once the relevant planning application is approved, the cost of an HMO licence will usually be approximately
£400-£600, although this can vary across the country and of course if planning consent is required there will be
additional associated costs.
ARLA recommends that landlords consult their local authority or a licensed ARLA letting agent for up-to-date
advice on planning-related issues. This is just part of the professional service that it is not unreasonable to
expect from an ARLA Member to complement the Client Money Protection and Independent Redress through an Independent
Ombudsman Scheme Membership