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Let students live where they want

22nd Jun 2012

Category: Opinion

Tagged:HMOs, Student, Planning

We have long talked and blogged about 'Article 4', for an explanation see here and for the possible consequences on house prices see here.

I now want to highlight the consequences for students, but this will equally apply to any young professional or LHA tenant who requires a 'shared home' or HMO (House of multiple occupation).

In short, Article 4 planning directions ultimately restrict landlords from setting up a house as a shared home.  It means the landlord must apply for planning permission, which gives the local councils the powers to refuse every application if they so wish - the rules are not quantitive, but qualitative, therefore the local councils can refuse permission with little explanation, and they do!

What is the effect on student housing?

Well, landlords with current shared homes now have a monopoly - few numbers of new shared homes will be created.  You may be thinking that this has no implication because there is enough shared homes in your area (I would debate such a stance, but I'll assume this view is right and explain why it's still a problem).  Like with any restricted or monopolised market, you are left exposed to being exploited. How? Well, why would a landlord improve their property or fix their repairs quickly if there is no new competition to keep them honest? Quite literally, HMO landlords are losing the free market push to improve their property as no new competition from new, comfortable and better HMOs are coming onto the rental market. I am by no means demonising current HMO landlords, many many HMO landlords are fantastic, however we must all admit that there are some (particularly in the student sector) that take enough advantage already, without being given the advantage of a monopoly.

Ultimately, Article 4, a restriction on the creation of HMOs only serves to restrict and monopolise what was a free market - it is dictatorship in a capitalist society.  Many people need HMOs to call home, even more in this expensive and difficult economic climate - so why restrict the creation of homes needed/chosen by so many?  Worse still, existing shared homes may deteriorate as current landlords are not incentivised by new entrants to improve their property whilst competition for rooms and therefore shared home prices increase - tenants, prepare to pay more for less.

What is the Council's alternative?

Well, this is simple.  They allow/encourage purpose built accommodation to accommodate growing numbers of shared home tenants.  Large purpose built student accommodation, which is well over-priced, makes it even more expensive for students who already face astronomical fees and costs.  I can hear the sarcastic groan of 'thanks again' from the student bodies.

What can you do?

Simply - Sign a petition to lobby the government to put HMO housing creation back in the free market ecomony that we should all enjoy.  Is an HMO Article 4 direction not a direct attack on the human rights of people who need or want shared home accommodation?  I don't see Council's making Article 4 directions to tackle areas where there are high concentrations of pensioners?  Nor should they, so why attack students and the young who generally require such shared homes?

Sign here: http://epetitions.direct.gov.uk/petitions/34625

Phil Ashford

Comfort Partner

An experienced Chartered Accountant and a Founding Partner of Comfort Lettings.

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