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Create An HMO Without Planning Or Licensing


Normally our April issue contains an article that is perfectly credible but untrue. Our April Fool tradition goes back to at least 2010. However, as the last year has been unbelievable, it should come as no surprise that this 'April Fool' substitute is the reverse – it is totally incredible but true. Here it is: Anyone can create an HMO anywhere without worrying about planning permission, property standards, facilities or the need for a licence. 

 What Are The Rules On HMO's?

 Portsmouth has an 'article 4' direction which means no one can create an HMO without planning approval. For the purpose of this explanation, an HMO is any dwelling occupied by 3 or more unrelated people and 'creating' an HMO means change the use of a dwelling from a family house or other usage to that of an HMO. To get planning approval, you need to meet certain criteria – like no more than 10% of other dwellings in the nearby area can be HMO's and you need a specified amount of shared space as well as having rooms that meet minimum sizes.

In addition, if the property houses 5 or more people, it will also need a licence which requires you to meet a whole different set of standards, both in how you manage the properties and also in terms of the facilities within them – woe betide if one of your wash basins is too short to get an elbow and a hand in at the same time…

If These Are The Rules, How Do You Create An HMO Without Meeting Them?

 As in all things, there are multiple government departments and they appear to work independently. We have long complained about inconsistencies between planning and licensing or the fact that the definition of an HMO differs between not just these 2 departments but the one that deals with council tax too.

The amount of council tax you pay is determined by the 'band' into which a dwelling is placed. A large family house may be banded as 'D' and charged more than a small flat which may be banded as 'A'. These bandings are determined by a central government department known as the Valuation Office Agency,. This all sounds logical apart from a few anomalies. For example, most people think the process is that the VOA decide on a 'rateable value' for a property and then, based on this, place it into the appropriate 'band' for council tax purposes. However, we know of many council properties which are classed as 'Band A' which means they pay the lowest council tax but their rateable values are higher than 'Band D' properties in the same area. This may not affect council tax but it means the residents are paying considerably more for water and sewerage than their wealthier neighbours living in large family houses, as water and sewerage charges are based on rateable value.

Anyway, getting back to the main topic – we have 3 definitions of an HMO: Planning (3 or more unrelated occupants), Licensing (5 or more unrelated occupants) and Council Tax (multiple tenancies in one dwelling). Painful but in a way, logical – so what has changed?

We have cases where the VOA have decided that an HMO room and en suite is a separate dwelling and should be treated as Band A for council tax purposes. There is some logic to this – if you have an apartment building with 8 self-contained 1 bed studio flats, then it is logical that each tenant/occupant should be liable for council tax. Similarly, if you have a large Victorian family house that has been converted into 8 self-contained rooms (including bathing/toilet/cooking facilities) then why should it be treated differently? But what if occupants of those 8 rooms have shared access to the kitchen, the conservatory or the TV room – should it be any different? The issue is that we have HMO's where cooking facilities and lounge are shared, yet the VOA are still saying they are separate dwellings and should be charged council tax accordingly.

Taking this logic, each room in an HMO being a separate dwelling, then surely it stops being an HMO and you can sell or rent the room as a standalone entity. If this is the case, the ex-Victorian family house that is now an 8-bed HMO, is actually 8 separate dwellings and therefore is not an HMO and does not need planning permission or licensing as such.

Apart from being a very stupid idea – it is also a bad idea as people who live in HMO's tend to be those least able to afford additional taxes and to burden them with large council tax charges, either directly or in terms of increased rent to cover the charges, will drive many more onto the streets and increase the issues of homelessness and mental health which already cost us far too much as a community.

Daryn Brewer, local landlord and letting agent said, "This is madness. If the VOA go down this route, do I now have C3 use rather than Sui generis? Can I convert the communal area into another dwelling? Please supply more bins – I am entitled to one per dwelling… Can we apply for two car permits per dwelling? "

We understand that local councillors agree this is a ridiculous idea but none were available for comment.  It is also being raised on our behalf in Parliament by Portsmouth North MP, Penny Mordaunt.

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