ARTICLE 4 – The Words That Every HMO Investor Fears!
Many coaches, mentors, and classrooms will tell aspiring HMO investors to “STAY OUT OF ARTICLE 4 AREAS!” But, in reality, things aren’t so black and white. But what exactly is an Article 4?
What is an Article 4?
In layman’s terms, Article 4 means that the Local Council has the authority to accept or deny the change of one property use class to another.
Permitted Development (PD) rights are the free grant of rights to change the class of a property. Permitted Development Rights allow you to change the use class of a property (for example, from C3 to C4) without submitting a full Planning Application… These rights are abridged by Article 4 restrictions.
For instance, if you want to turn a single house into an HMO or a hotel. Or converting an old nursing home into a block of flats. Before making these changes, you must obtain planning permission from the local authority. Many investors may be hesitant to purchase properties without a guarantee of a successful planning application as a result of this.
KENT HMO BLOG TIP: When using PD Rights, always obtain a Certificate of Lawfulness to protect yourself from any retroactive Planning or Article 4 Regulations changes!
So let’s go over Article 4, how to handle objections, and even how to buy HMOs in Article 4 zones.
How do you find an Article 4?
Understanding the Article 4 Regulation in the local area should be one of your top criteria as an HMO investor looking for a suitable investment area.
The Council website is the best place to look for an Article 4 Area within a location. Almost all councils include a red “Article 4 Map” that shows which streets or boroughs are subject to Article 4 restrictions. A quick Google search for “Article 4 Areas in Ashford” will yield the answer.
It is recommended that you research and understand all Article 4 regions relevant to your investment area. For some larger cities, such as London or Birmingham, almost the entire city is subject to the Article 4 restriction; it would be difficult to find a street that isn’t!
Should you invest in an Article 4 location?
It is possible to purchase an HMO in an Article 4 area; we have seen some excellent deals emerge from these areas. However, there are some considerations to make when evaluating HMOs in an Article 4 Area in order to overcome Council’s planning objections.
TIP ONE – Attempted Sale Proof
Show the Council that you or the previous landlord attempted but failed to sell the house.
TIP TWO – Look for Comparables
Find a property in the same neighbourhood that has already undergone a similar conversion.
THIRD TIP – Create a Pre-Planning Application
This is an excellent way to get an early indication of the likelihood of your application being accepted.
TIP FOUR: Consult with a Local Planning Consultant
Because knowledge is power, make use of their knowledge and expertise.
TIP FIVE: Purchase an existing HMO
Negotiate and purchase a run-down property that has already been used as an HMO and does not require a Change of Use.
TIP SIX – HMO Density and Sandwiching
Determine the HMO density in the area and whether or not your neighbour operates an HMO.
Buying in an Article 4 Area is difficult, but if you know where to look and how to negotiate, you can often find good deals with validated demand. Before making a purchase, it is always best to understand the likelihood of planning success.
