Think Carefully About The Location Of Your HMO

 Location is a key factor in any property purchase but even more so when you are considering buying a HMO.

A recent government report from Housing Minister, Caroline Flint showed concern over the build-up of HMO’s in certain areas; particularly university towns; and wants new powers to allow local councils to dictate where a HMO could be allowed to operate.

There were several issues identified including:

• restricting the Use Classes Order planning rules allowing for HMOs to be brought under greater council control;

Matthew’s comments:  So what does this mean in practice.  Essentially, it means the local councils could be able to force a planning application to be made whenever a house is classified as a HMO.  Remember a HMO is where two or more unrelated people are sharing a house, so even those of you with small HMO’s of 3 or 4 rooms could be affected. 

The government will then raise additional funds through a new planning tax; this elongates an already lengthy process to purchase a property (take 8 weeks at the minimum in the current market) and means that the establishment of an investment for the landlord is subject to a planning officer who does not understand this market, making a decision on whether to allow the HMO to operate or not.

• capping and controlling the distribution and the dispersal of HMOs by using the local planning system to set up ‘areas of restraint’, which have been shown to help balance communities. 

Matthew’s comments: This essentially means “selective licencing” requirements to be brought upon a particular area.  This means several things could happen. 

Firstly, if HMO’s are refused to be allowed to operate, then the landlord will either have the choice to single-let or sell-up.  As most HMO’s are bought on a multi-let basis, its unlikely that more than 25% of them will stack on a single let basis and thus the landlord will need to sell the property. 

This then means a period of void whilst the landlord tries to find somebody to purchase a property in what the government are calling “student ghost towns”.  With the current market, they will probably have to heavily discount the price, wait 6 months to sell and make a loss on their investment.

Matthew’s comments:  Lets take this one in two parts.

More community liason and codes of conduct are needed, are necessary and will help – but they won’t solve the problem. The problem starts at home and with society at large – not with the students living in a new area.  So whilst having a helpline that the neighbours can ring to complain (notice nobody ever rings up to “thank” anybody anymore) and having a liason officer to talk through issues between students and residents is fantastic – this needs to be driven home through by the university in controlling their students behaviour and penalising them for it should they break the rules.

The formation of even more new student halls is one which I particularly have an issue over.  I have no problem with universities trying to house more students but its recognized that generally a university can’t house more than 50% of its students (its often far less than this but I use this to illustrate a point).  This being the case; the only way of building more halls of residence is to take down older buildings, classrooms, lecture theatres or look for barren land (have you seen much of this recently in most towns in the UK?) where they can redevelop it.

Most of these student halls are owned by large faceless corporate bodies who are interested in numbers – a 200 unit student hall housing 600 students is a very lucrative business to be in.  They are not necessarily going to take the same care and attention that an individual private landlord will over their property.  The argument goes both ways I know but ultimately, put your hand on your heart and ask yourself – would you rather deal with a caretaker who doesn’t have the answer but has to ask somebody else who doesn’t know who asks somebody else in an office 300 miles south of you who says no – or would you rather ring up the landlord and get a yes or no answer directly.  I know which one I’d rather prefer to deal with.

• Councils should target resources such as refuse/letting board collections, street cleansing, fly posting controls at key times in the academic year; establish landlord accreditation schemes; link the demand with regeneration opportunities; work with universities to consider purpose

Matthew’s comments:  all of this is done already as far as I am aware and is just the government either trying to think of something else to attach to this report or thinking up something new – which they haven’t.

All of the university towns that I am aware with have accreditation schemes, they are all regenerating their housing stock and community facilities, refuse collection could always be improved (try a national recycling scheme as a starting point) and fly-posting I have seen in several cases work well.

So, whats the point of this whole report and why was it commissioned?

The reason banally given is that student build-up which is not “governed” leads to student ghost towns in the summer which negatively impacts the local communities.  The question I ask is – has Caroline Flint ever been to Skegness, Bournemouth, Littlehampton or Scarborough in winter?  I don’t think any of these communities are exactly buzzing when the summer tourist season leaves but then the government cannot control the seasons nor can they persuade people to go to Skegness in February – because frankly, its cold, wet and rather horrible.

My thoughts are that we do require more liason and close links with the communities – and the universities, accomodation officers and landlords should be encouraging this.  But, at the same time, even more regulation on a sector which is already crippled from the negative connotations and red-tape that surrounds it today, will only serve to drive more landlords out of the market and push these students towards either “unlicenced” landlords or the larger “corporate” bodies offering a staid commoditized option.

My recommendations would be for actual real consultation to happen – rather than the usual government departments consulting with other government departments – for any real chance of finding out exactly what is going on and how we can then work together to turn things around.

For more information and to make comments, visit: http://www.communities.gov.uk/publications/planningandbuilding/evidencegatheringresearch