Oxford City council has released an initial response to the new instrument involving a further class of residential unit (let to more than 3 and less than 6 sharers) C4.
The planning department has implied that existing HMOs will automatically become C4 usage. They have stated that “no planning permission will be required to change from a C4 HMO use to a C3 Dwelling House. However, once changed to a C3 Dwelling House, planning permission will be required fro the reverse process to change back to a C4 HMO (eg a shared student house).
There remain a number of uncertainties and a number of questions arise. Will property that is currently exchanged but not completed, where investment landlords have purchased in good faith, require planning permission before they can be let to sharers? Will transfer of ownership from one client to another of a C4 use property require certificate of lawful use as part of HIPS? If a 3 bed (3 sharer property) is let to two sharers one year, will planning permission be required in subsequent years to let to three sharers again?
There is no indication of how this will be policed or enforced… Will it lead to neighbourhood “house watch” schemes? Will less scrupulous landlords be forced to draw up contracts with fictitious names on, if they choose to let to a family in an existing C4 property? Will tenants and/or guarantors require proof of C4 usage before they sign agreements to rent shared houses?
Some commentators have stated that the instrument has been left intentionally “woolly” in order that local authorities can let case-law further refine the legislation in much the same way that it has with the Housing Act 2004.
Whatever happens this will result in fewer landlords and agents letting to sharers; this in turn should, over the next few years, ensure an increase in value of C4 property, in excess of the neighbouring property still in owner occupation. Some commentators have suggested that in certain key HMO areas that property values will drop by as much as 20% if they cannot be bought by investment landlords.