Shared house landlords are in a stampede to buy property to convert in to houses in multiple occupation (HMO) to beat planning deadlines.
Councils all over the country are signalling their intentions to control the number of HMOs in their districts with article 4 planning directions.
These directions mean landlords must get planning permission before they rent out an HMO for three to five sharers – usually students.
Councils have to give notice of 12 months – and in that window, landlords are rushing to buy up properties.
Some cities, like Nottingham and Leeds, that have already imposed article 4 restrictions have reported house prices plunging by between 15% and 30% in some neighbourhoods close to universities.
Bath and North East Somerset Council is the latest to announce HMO restrictions and estate agents in the two are reporting a boom in sales.
The date tougher HMO rules start is July 1, 2013. Under the directions, any HMO already let before that date is deemed to have planning permission.
Estate agents Madison Oakley agree HMO investors are racing to buy homes to beat the deadline.
“We have sold five terraced homes in Oldfield Park, near the university, in the past two weeks,” said a spokesman. “All the bids were more than the asking price or competitive and went to investors.
“Property investors comprise...
at least half of the prospective buyers looking for homes in Oldfield Park. Losing such a big market will affect property values.”
City councillor, Geoff Ward, Conservative spokesman for homes and planning, said: “By effectively giving landlords a year-long warning that they intend to bring in this policy, landlords have time to snap up a large number of the remaining family homes before the directive is implemented.
“This policy could actually increase the number of student houses in many areas, by simply pushing the problem on to other parts of the city which currently have low student populations.”©LandlordZONE® – legal content applies to England and is not a definitive statement of the law, always seek professional advice. If you have questions on these issues go to the LandlordZONE® Forums