The house in multiple occupation (HMO) loophole

Posted by Sadie Pitman on
The BBC's 'Inside Out London' broadcast earlier this week shines a spotlight on the growing phenomena of landlords carving up suburban houses into HMOs.

A HMO (house in multiple occupation) is a property that houses at least three tenants (from more than one household) who share a toilet, bathroom or kitchen facilities.

According to the Town and Country Planning Act 1990, planning permission is needed where there has been a material change of use of a building. However, there are exceptions to this general rule. According to the General Permitted Development Order 2015 (GPDO), you are allowed to change a dwelling for a single household to a dwelling for up to six people of multiple households.

A landlord can therefore convert a dwelling house into a small HMO without the need for a planning application. However, it should be noted that the HMO must still be licenced and if the local Council has chosen to implement an Article 4 direction (removing this GPDO exception) planning permission will still be needed.

The BBC programme focuses on the tendency of London landlords to let small rooms in HMOs to the homeless who pay with their housing benefit, with Hounslow council leader claiming that said landlords are therefore "working the system at the expense of the taxpayer".

Indeed, the BBC argues that if the landlord had sought planning permission to convert the original dwelling house into self-contained flats, it is unlikely that their local planning authority would have approved an application resulting in such tiny rooms. Thus by using the HMO model the landlords have exploited a loophole in the system in order to maximise their profits.

The Chair of the Communities and Local Government Committee has vowed to investigate, whilst some Councils are taking direct action themselves – Newham is introducing new licencing schemes to regulate HMOs. Yet, with the GPDO exception having only been introduced in 2010 it is perhaps unlikely that we will see an amended national approach anytime soon. 

About the Authors

Photograph of Sadie Pitman

Sadie is a Solicitor working in our Planning team.

Sadie Pitman
Email Sadie
020 7814 5418

View profile
Photograph of Sara Hanrahan

Sara specialises in urban redevelopment and infrastructure projects, particularly advising in relation to compulsory purchase and affordable housing schemes. She also has niche specialism acting for high net worth individuals.

Sara Hanrahan
Email Sara
020 7814 5407

View profile