This week’s column is by special request; I was asked to write some thoughts this week on Article 4. It is especially timely as by 5pm on Friday, March 20, 2015, all representations must be made, so for what it’s worth – here are mine and some other experts thoughts!
Firstly, it’s important to understand what Article 4 actually means and the impact it’s had on other cities who have introduced it.
Essentially, Article 4 gives additional powers to the City of Lincoln Council to manage and control the number of houses in multiple occupation, which is where people who are unrelated rent a room in a shared house.
What this will actually mean is that for any shared, rented properties, full planning permission will be required for a ‘change of use’ from a Class C3 to a Class C4 from March 1, 2016.
For those in favour
If you live in a nice quiet street which is full of other people who live and work there, and then investors come in and turn most of the road into shared housing, there is a perceived view this causes problems in the neighbourhood.
There are fears of the rubbish piling up and a transient population which isn’t ‘tied into’ the local area, and as such the community feel that once existed can disappear quite quickly.
Having Article 4 powers means they can decide how many and which properties can be rented on a shared basis.
For those against
Shared homes are a great way for students to afford to go to universities and afford the fees. They are also a great way for local skilled workers and professional people to share homes together to help save for a deposit for their first home rather than having to move back with mum and dad.
What those who need shared ownership are frightened of is this will restrict their ability to put a roof over their heads at an affordable cost. For students or young professionals the idea that they just live in ‘squalor’ and don’t form part of their local community is tarnishing them all with the brush of a few.
Who are the real winners and losers?
Although no-one has carried out any robust studies I am aware of, there is evidence of the pros and cons from other areas which have had Article 4 for a few years.
For areas which are already quite well known as student spots, what we have seen is people’s homes now struggle to sell. The investors don’t want them and families don’t want to live there, particularly if they are on busy main roads.
Secondly we’ve seen in areas where there is a real housing shortage, people now can’t find enough rooms to rent, so are having to continue to live with mum or dad or move away, limiting the potential labour market.
In areas which are still predominantly homes for families and professionals as opposed to rented, then it may help maintain the current status quo for a while. However, our population is changing and certainly in the East Midlands, there is a move away from owning large homes.
With or without Article 4, it’s likely the community will still see a changing dynamic, perhaps with the larger homes being made into smaller flats or houses where possible.
Talking to Paul Collins from Belvoir Lincoln, who is one of the most experienced lettings experts in the area, his fear is that the reason they are being introduced is to try and help solve a problem of anti-social behaviour, and the two are not necessarily linked, so it may make little difference.
He also worries the area chosen is so large it could restrict the growth of mulit-lets in parts of Lincoln where they are most needed, just at a time when tenants are desperate for homes to rent or rooms to share.
From Paul’s perspective though there is still a strong business and housing case for landlords to continue to create more shared homes in the future, with or without planning permission. For Paul “the tenant demand is strong and the income returns are much higher than standard lets, so I expect they will still be a growing number in Lincoln.”
For those interested in finding out more, the Residents Landlord Association suggests twenty questions all councils should ask themselves before they introduce the new rules, which could help some but adversely affect others.
Finally, do have your say; do email to [email protected] or by post to Article 4 direction, City Hall, Beaumont Fee, Lincoln, LN1 1DD.
And remember, any representations must be made by 5pm on Friday, March 20, 2015.
Kate Faulkner is Managing Director of propertychecklists.co.uk. The site gives free advice to consumers on how to measure their local market and an understanding of how to buy their first home or trade up. Kate’s background stretches from self-build to part exchange to buy to let and renovation. She is the author of the Which? property books and regularly appears on local and national media.