What Cost Balanced Communities? One Landlord’s View on Article 4 Directions

Steve Bartlett, NLA Representative for Dorset, explains his change of heart about Article Four Directions

Article 4 Directions mean that anyone renting a property with 3 or more unrelated people will require planning permission if the property does not have established rights to do so. Many local authorities are using this ‘planning tool’ as a mechanism for creating what they call a more ‘balanced’ community. In reality these local authorities are preventing tenants the freedom to choose where they wish to live, and for landlords, to prevent them from renting out properties to certain groups of people.

So called ‘studentification’ (an area that has become saturated with high numbers of students) is often quoted as a reason for introducing the Article 4 Direction, whereby a often small but vociferous minority of local residents have complained to the local authority about the anti social behaviour frequently associated with student populations. Where councils have introduced this measure, it is not only students and landlords who are affected but other groups of individuals who traditionally choose shared housing, e.g. young professionals, migrant workers, workers on low wages and benefit recipients.

I fully understand and sympathise with home owners who have seen their residential areas slowly turned into an extension of the university campus, but this is a product of allowing universities to be built and then grow without providing sufficient housing and infrastructure. In most cases, the horse has already bolted and Article 4 cannot return former residential areas to their previous status because the right to operate residential properties as Houses in Multiple Occupation (HMO) has been established through use.

It is probably fair to say that the majority of the general public support Article 4 legislation, and I confess that my initial reaction was the same, however, as my knowledge has increased and the issues have emerged I am now vehemently opposed to it because of how I believe local authorities can and are using the legislation to  ‘shape’ it’s view of society, as opposed to how the society will shape itself through the ‘natural order’ of things. For example, where areas of towns have a high number of HMOs, Article 4 will be used to prevent additional HMOs from being established.  I believe this will happen not only in areas where there are high numbers of students but additionally, and specifically where the groups of people mentioned earlier wish to live. I have heard councillors and even my local MP state the desire to create a ‘more balanced’ society in certain areas of the town and this is my main concern.

Just what constitutes a ‘more balanced’ community? More Welsh people, more Scottish people, more migrants, more married people, more gay people, more older people, more children, more rich people, more poor people, more working people, more unemployed people etc. etc. (get the message?) And what right has a local authority to decide what this should look like?

What I believe local authorities mean by a more ‘balanced’ community is to get rid of those elements of the communities that that they dislike or are perceived to be problematical.  I have heard this termed as ‘social engineering’ and I guess this is exactly what it is and the target of such prejudice includes the poor, the vulnerable, migrants and yes students who live in shared accommodation. We should not forget that all of these individuals have the some rights as anyone else!

It is my belief that in the main, communities structure and balance themselves naturally based on all sorts of factors and these communities change constantly over time. For example, former residential areas near universities now have thriving vibrant communities which bristle with life and where businesses (including being a landlord) now thrive in areas which were previously in decline. Yes there are problems, although they are often overstated, but these can be addressed by cooperation by stakeholders within the community and by the council using existing powers when required.  We should not allow Local Authorities to use Article 4 legislation to denude our basic freedoms of choice or to ‘socially engineer’ our communities.

It’s been a busy year…

From our Save Housing campaign against Article 4 directions to our NLA Landlord Live show, it has been another busy year at the National Landlords Association.  Let’s take a look back on this year’s big stories and how they impacted on the wider private-rented sector…

2011 started with our Saving Housing in Portsmouth campaign – our on-going fight against Article 4 directions being taken out by local authorities across the UK, in an attempt to limited the amount of shared housing in their areas.  It has obvious ramifications for landlords, particularly those which cater to students. 

We extended the campaign to Newcastle in February, along with 26 other local authorities.  You can join our Saved Shared Housing campaign by visiting  our website.

Also in February we announced extended hours for the NLA Advice Line.  It is now open from 9am – 7pm on Mondays (except bank holidays), and from 9am to 5pm Tuesday – Friday.  More than 800 calls a week are now made to the Advice Line.

In March, the government announced Stamp Duty Land Tax changes, which we campaigned for.  It provides significant tax savings for bulk property purchases.  NLA Chairman David Salusbury welcomed the changes: “The stamp duty concessions on bulk purchases will encourage landlords to invest more in residential property, thus providing much needed housing in the private rented sector.”

In April, we launched NLA Property Insurance, providing insurance tailored specifically to the needs of landlords, providing coverage for loss of rent, temporary accommodation for tenants if needed, theft of keys and malicious damage by a tenant.

In May, the inaugural NLA Landlord Live took place at London Olympia, with thousands of landlords attending to meet with over 300 suppliers servicing the private rented sector.  There were live property auctions, free workshops on local housing allowance and our Advice Line staff on hand to answer questions.

In June, we released statistics showing more than half of private residential landlords are planning to reduce the number of properties they let to tenants on housing benefits.  Worryingly, more than 90% of landlords say they can’t afford to reduce their rents to absorb the cuts.

Also in June, we welcomed two new Non-Executive Directors to our board – Tony Richard and Carolyn Uphill.  Both were formerly NLA Regional Representatives.

In July, we released our tips for landlords planning to let their properties during the 2012 Olympics.  If you are planning to let out your property, you’ll find them helpful.

In August, our landlord survey found 96% of landlords have a “very good” or “good” relationship with their tenants.  3% say their relationship is adequate while just 1% say its poor.  The survey also showed the majority of buy-to-let landlords would be significantly affected by any rise in interest rates.  A rate rise of two percentage points would have a negative impact on 89% of landlords, with 53% saying the affect would be significant.

In September, we released figures showing two-thirds of private landlords would consider taking advantage of the government’s Green Deal, designed to make homes more energy efficient at no direct cost to the landlord

In October, we welcomed our new Chief Executive Officer, Richard Lambert, to the NLA after a successful nine years as head of at the British Woodworking Federation.

In November, we held our NLA National Conference in Birmingham, with keynote speaker Terrie Alafat, Director of Housing Growth and Affordable Housing at Communities and Local Government describing the PRS as “definitely at the top of the government’s agenda”.

And to end the year in December, we made a special Christmas donation to homeless charity Crisis, to help them provide 50 places for homeless people over the festive period. 

Although 2012 will inevitably bring challenges for landlords, it is our continued mission to help promote best practice (as shown by so many of our members) whilst representing landlords at a local and national level.

A very Happy New Year to all the readers of the NLA blog!

 

 

 

Why hast thou Article Four-saken me?

Ken Staunton, NLA Head of Regions discusses the spread of Article Four Directions

Unless you’re an avid member of the National Trust (or happen to live in a conservation area) Article Four of the Town and Country Planning Act was probably not a major topic of conversation up until a year or two ago.

All of that has changed, thanks to some of the last actions of the previous Government in the Spring of 2010.

Up until April 2010 private homes housing fewer than six unrelated individuals, irrespective of their tenure or occupiers, were classed by planning regulations as ‘dwelling houses’. This was based on the notion that it does not make a great deal of difference to local infrastructure whether a household accommodates three unrelated sharers or an average sized family.

So far so good. Or so you would think….

Despite their own evidence to the contrary (see the 2008 Rugg Review of the Private Rented Sector anyone who is interested), the last Government decided that the over- concentration of Houses in Multiple Occupation (HMOs) was a problem of national significance. They then introduced legislation creating a whole new ‘use class’ for planning purposes. From that point onwards, a property could be either a ‘dwelling house’ or an ‘HMO’ dependent on who lives there.

Long story short, the Government changed colours and amended this legislation to remove the automatic need to obtain permission to change a house from definition to another, but allowed local authorities to require such an application in their area if they so choose.

The problem is that this is a little more than just a labelling exercise. Increasingly local authorities in England are using this new found option to arbitrarily limit new shared homes within their boundaries. So far, more than 30 have started down this path, with a few opting to forego the usual notice period and jump straight to implementing ‘Article Four’ notices (as the regulation is known) with immediate effect.

Some argue that this is social engineering of the worst kind; others describe it as nimbyism of the worst sort. Whatever the label the net impact is that the availability of shared housing is to drop at a time when demand is high and getting ever higher thanks to Government policy.

In January, single Local Housing Allowance recipients under the age of 35 will only be able to claim for a single room in a shared house (currently the threshold is 25.) This combined with other welfare reforms and an overall housing shortage is predicted to increase demand for shared accommodation by more than 60,000 individual units.

My question to Government, both local and central, is where are these homes supposed to come from? This at a time when so many local authorities simply want to push those on the lowest incomes and with the greatest need elsewhere.

Landlords around the country cannot afford to ignore this issue. To see if you’re affected, or to let us know that your area is considering an Article Four Direction, please visit the NLA’s website and help us to ‘Save Shared Housing’.

Nowhere left to go….

We’re told that 2011 will be all about localism. Which is great, local people dealing with local problems in a local way.

However, not everything can be considered in isolation without taking into account the wider context. In the same way that very few housing issues can be viewed without reference to wider social factors.
This kind of lateral thinking is particularly important when you consider the growing number of local authorities attempting to manipulate the housing market in their catchment using new and extended powers. Of course this is nothing new, planning decisions have long controlled the available supply of housing, targets have influenced the type of units built and infrastructure has determined who wants to live where. But the latest moves by some local authorities seem slightly different.

Using part of the Town and Country Planning Act, a few local authorities including Portsmouth and Manchester to name two, are trying to require all landlords wishing to establish a new small HMO obtain planning permission before agreeing a tenancy.

These ‘Article 4 Directions’ effectively roll back housing policy to a pre-election stage, before the Coalition granted permission across the board for small shared houses, whereby households of three or more unrelated people can only share a home (which had previously housed a family) if permission is granted by town hall.
Ideological matters aside, this kind of policy – assuming the requirement is subsequently used to limit the number of HMOs in a town – is likely to have some pretty far ranging consequences.

The individuals who live in shared houses are a varied group drawn from a variety of backgrounds – key workers, students, migrant workers, recent graduates and vulnerable adults. But the one thing they are all likely to have in common is a very limited housing budget. Unsurprisingly, this means that they are unlikely to be able to move to another type of property.

This type of devolution of authority to local councils cannot be done without also shifting responsibility for decision-making.

Which will present local authorities with a number of very difficult questions.

If local communities do not want shared housing in their back-yard that is their right. But I am far from confident that the people making the decisions locally have considered all of the consequences of barring sharers from local communities, whether they are nurses, students, teaching assistants, street cleaners or shop assistants.

If a person on a low income cannot afford to buy or rent a self contained home of their own, and the option of sharing a safe, secure home with others is removed. Where are they supposed to live?

If they cannot live locally, what happens to the local companies they work for? What will happen to the local businesses which rely on them to stay afloat?

Answers on a post-card anyone?