The best thing about life/business/travel/family is the journey and it's the twists & turns that shape us!!
We wanted to share a recent twist/struggle in our journey - the IMMEDIATE implementation of an Article 4 directive removing the right to convert a C3 dwelling to C4 'small HMO' - the news no property investor wants to hear 😱, especially not when you've TWO high end renovations in full swing!! 😱😱 - one of the first immediate implementations made across the UK!!
So what do we do, just STOP 🛑 and wait for planning - as our council suggested? READ ON TO HEAR WHAT WE ACTUALLY DID ⏬
DISCLAIMER - we understand the need for planning control and believe the use of Article 4; especially around small HMO, Class MA rights and control of Short Let Accommodation is right to be on the rise. However correct process and planning policy is required BEFORE it’s application
✉️ - mid December ‘22 we received written notice of an Article 4 consultation and it’s immediate effect from mid November!! It took a month for the council to issue these letters despite being on the HMO register over 20 times, having direct email contacts for those on the register, operating as the largest specialist managing agent in the Borough and that that the action was signed off at board level in October??
🔨🪚📼 - at this time we had two sites mid renovation with build costs over £200k on each; plus purchase costs and no planning guidance in place setting out council policy… following a short period of WTF 😯 we set to review our position in detail in the interests of our business and more importantly our valued investors whose funds were tied up in these properties;
⏳ - with only a 3 month consultation period; and one month lost due the month it took to notify us! We jumped all over the evidence stated for an A4D action and attended all consultation events - making our voice very much heard! What became apparent was the limited awareness amongst landlords & investors that such action was happening and then the willingness for individual parties to object the councils actions for risk of future issues;
📂 - delving into the evidence it became apparent it was I’ll considered and purely a drive to fix existing ASB issues which councillors don’t like - which we appreciate, but planning is a matter of defining land use not a tool for long term management. As part of this consultation it is also intended to extend licensing to all rentals properties forming two or more households! This alone was shown to raise circa £6m for the council enforcement team across a 5 year period - it is this money which is needed to seek unlicensed HMO’s, enforce licensing and manage long term - not planning!
👨⚖️ - with this background, we presented a 33 page response comparing the report with real world evidence; which the council hadn’t done engaged a versed solicitor and raised a legal challenge against the immediate action - all provided to the Secretary of State for Housing who signs off all Article 4 actions 📩
✅❌ - so did this help?? We definitely made our point but sadly despite the clear rocky legal ground the council placed themselves they chose to push ahead for political purposes despite the significant financial risks should conversions not receive planning 💷💷💷 - maybe not the right thing to do in time of financial crises and battling budget deficits…..
😮💨 - having carried on building out the projects throughout this time we were now forced to run the gauntlet of planning. With the knowledge most recent planning applications had been called into committee; despite meeting size standards and receiving officer recommendation to consent, going on to be reviewed with a clear anti-HMO stance from a number of counsellors despite the local and London plan noting them as an important housing provision. With no clear policy to guide these meetings had quickly rejected proposals on wholly emotive grounds.
💪 - we’re pleased to say however, supported by the voice we’d made heard, the strong application packs provided and the clear whip given to councillors to avoid risk of potential claims, that in April (5 months in!) ours and a series of other investors in the Borough received much needed planning and could finally sleep easier at nite!!
In summary, we didn’t prevent the action but we strongly believe the success of our subsequent applications was heavily assisted by the professional & legal pressure along with clear financial ramifications demonstrated to the council.
Again, we agree the need for Article 4 to be a tool for councils to effectively town plan and thank the councils planning team for their speed, however immediate action based on evidence proven to be floored yet carrying on all the same shows a far from democratic process and has set a very dangerous precedent for Boroughs across the UK and especially in London to follow - with no risk of question; even by the Secretary of State.
The landscape will always evolve and we learn from each new challenge, but as long as we continue to operate professionally and to take regular, considered action we’ll continue to move forward ⏩ #stronger
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