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Article 4 In Doncaster... What Is The Latest?

01/02/2019
 

There has been a lot of talk about the changing regulations in Doncaster when it comes to HMO's, and i'm sure everyone who invests here currently or is looking to invest in the area is sat wondering how it will effect them in the future?

 

To summarise, Article 4 will mean all HMO's within the designated area of Doncaster will need planning permission. The risk of this is not getting planning permission granted or having numbers of bedrooms restricted in order to gain planning permission. It will be introduced from October 2019 and any HMO not currently tenanted with a licence will need planning permission. My advice is if your HMO is currently under construction, get it finished before this date and get the licence applied for as soon as it is in a licence-able state. If you are doing a development that has already had planning granted, you don't have to worry, you can still finish it and get it tenanted after October 2019. 

 

I work pretty closely with the council and always try to gain as much information from them about up coming changes and how this will effect investors in order to spread the word far and wide on how best proceed with current investment strategies. Article 4 is a funny one.... not in a haha sense (obviously), but in the sense that the information i've received so far is conflicting. I'm guessing this is because nobody actually knows how it will effect HMO's going forward until it is actually in place. 

 

I completely understand why the council have brought it in, Doncaster has had a massive expansion of HMO's by local and non-local investors in the last few years and they feel they need some sort of control to get to grips with whats actually going on. Up until the additional & mandatory licencing schemes came in im pretty sure they were completely stabbing in the dark about how many HMO's were actually in operation in the town. Estimates vary wildly between 100s and 1000s of rooms.

 

I've had feed back that planning permission will still be possible, but i'm not convinced by this, density of current HMO's will be taken into account and im pretty sure on this factor alone it will be difficult to get the planning permission needed. We've recently put planning permission in for a few commercial to residential developments and the feedback from the planning officers is not the most positive with regards to current numbers and demand, this hasn't stopped us getting planning but you can sense the genera feelings towards the HMO sector is not massively positive. This is probably due to lack of understanding of the demand and need of HMO's, they provide good quality & affordable housing solutions and there is most certainly a demand still and i'm sure there will be in the future also.

 

On the plus side there are still areas of Doncaster that will not be covered by the Article 4 Directive yet still have a HMO demand, these include Bentley and Rossington. Another positive is that Article 4 will mean that HMO's will be taken more seriously as an investment class and therefore lending and values will rise as they will become a restricted commodity. In other areas this usually takes around 5 years before the HMO market values really respond but as Doncaster is well overdue a housing price increase who knows what the results will be in the near future! 

 

With change comes opportunity! 

 

If and this is an If - house prices and/or HMO values increase because of article 4 in the next few years, now is the time to buy! Either before this all comes in or to target preexisting run down HMO's that people want shut of because they haven't kept them up to enough to roll with the amazing standard of HMO's we now have. The prices will still be stable for a while, meaning that if they can be picked up, refurbished and re let, that in the few years that follows, they will not only be a good cash flow investment but actually there will be a decent capital appreciation built in there too!

 

Personally i think any serious investor will adapt, that's business after all! New areas with HMO demand that haven't previously been discovered will crop up outside the Article 4 area, strategies will change, buying ready made HMO's will become more common place, Buy To Lets will have there day again and some will fight to the bitter end to get planning in the Article 4 areas and win. 

 

I still think Doncaster is on a positive trend in the upwards direction and that any changes that are sent to try us should be considered carefully and used to our advantage!

 

Peace out - Chelsea

 


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