Planning vs Licensing – Shared Housing

A row of typical red brick British terraced houses

Many people think that planning and licensing are the same thing and are managed by the same departments in the council … this is not correct and mixing these things up could be a costly mistake.

A simple way to think about the difference is that planning relates to the building and licensing relates to the people. It is a little more complicated than this but is a good starting point.

Let’s look at planning first …

In the UK there are a number of different planning classes which are managed by the planning department in the various councils. The main categories relating to housing are:

  • C3 – this relates to the house that you usually live in as your single residence
  • C4 – this relates to a shared house with no more than 6 occupants
  • Sui generis – this relates to a shared house with more than 6 occupants

In general, there is no planning requirement to use a property as a single residence – it will automatically be a C3. Planning would be required if building a new property.

If someone wants to change a C3 into a shared house with 6 or less occupants (a C4) then some parts of the country require planning before this can be done. Often this is under what is known as an Article 4 Directive and can be area, town or country specific. For example, the whole of Wales is an Article 4 area which means any conversion from C3 to C4 requires planning permission. In England, it is usually town or postcode restricted. Find out what is happening in your area.

If someone wants to create a larger shared house with more than 6 occupants then full planning permission is required everywhere and this falls under the sui generis category. If someone has planning for say 7 people and wants to increase it to 9 then again, planning permission is required.

On the licensing side, there are 3 categories – mandatory, additional and selective.

If a shared house requires a licence then this will last for 5 years (with a few exceptions) and the cost is dependant on the number of occupants.

Shared houses that require mandatory licences are those with 5 or more tenants over 3 or more storeys (in Wales) or 5 or more tenants (in England).

For areas where the council consider needing limitations in place then they will instigate additional or selective licencing. This is usually for houses where there are 3 or more tenants in those specific areas and the requirements are exactly the same as for a mandatory licence. However, different councils could have different requirements.

Details of the licensing requirements can be found on the individual council website under HMO. Application forms and guidance can also be found there.

As you can see there are significant differences between planning and licensing and you need to be really clear what applies in the area that you are looking to invest in.

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