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Hightown HMO plans rejected after residents warn of impact on their community

Plans to create a six-bedroom house in multiple occupation (HMO) in Wrexham have been rejected after residents warned it would tear their community apart.

Proposals were submitted to Wrexham Council to convert an existing house on Beechley Road in Hightown to accommodate a total of seven people.
However, after members of the authority’s planning committee carried out a site visit today, they chose to go against the advice of officers and refused the application. They were greeted at the property by members of the Beechley Road Residents’ Association carrying placards, including one which read ‘Don’t Turn Beechley Road Into A Ghetto’.

Neighbours raised a number of concerns about the plans, including issues over parking and fly tipping as a result of the six existing HMOs on the street.
They have previously presented a petition with 90 signatures against the development.

John Harding, chair of the association, said: “A line has to be drawn somewhere to ensure the quality of life of long term residents is maintained, and in our opinion this is where the line should be drawn.

“There has already been an adverse impact on house prices in the road as a result of decisions taken in the past by the planning department.

“This deterioration can only accelerate given the authority’s perceived plan of allowing properties in the road to become nothing more than cheap accommodation for short term residents and the problems they bring with them.

“We see this as a direct attack on our future and will do our utmost to prevent this from happening.”

After committee members returned to the Guildhall, they were told that the proposals complied with all of the council’s policies.

Chair Mike Morris warned that valid grounds would need to be found for refusal.

But several politicians voiced their frustration at the increasing number of HMOs, including the area’s councillor Graham Rogers, he said: “Having visited the site, and I know the site very well, my concerns are still on parking and the four spaces, the double yellow lines at a very busy junction, the speeds at excess of what they are supposed to be and 90 residents have signed a petition which we should take the cognisance of.”

He was supported by Cllr Paul Jones, who said: “It’s very disappointing that our planning policy and planning guidance is inflicting yet another HMO on a community in Wrexham. The area is not saturated with HMOs, but it’s going in the wrong direction. HMOs done in the wrong way cause considerable problems for that community.

“It will be the people in that community baring the consequences whichever way it goes.”

Cllr Rogers said the plans should be refused on the grounds of parking and access, despite being told the highways department had no issues.

His recommendation was backed by eight votes to four.

Source: Wrexham

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Could HMOs turn out to be not the golden goose that investors hope for?

It’s a funny old world. When I was at my busiest, the type of properties that investors now actively seek out were considered sub-prime and to be avoided.

Specifically, these include student lets, lets to sharers, sitting/assured tenancies and Houses in Multiple Occupation (HMOs).

A corollary of the rush into buy-to-let is that many now see BTL as a way of augmenting their income.

Certainly in London most of the ‘total return’ on BTL has come from capital appreciation, but elsewhere income has become important, and possible.

But as yields have suffered, especially in the last five years off the back of unprecedented and market distorting low interest rates, those seeking income have moved into alternative asset classes.

Many would say student housing has been over-played. However, we all know that many renters are now forced to share houses – which has made HMOs look particularly attractive.

This has not gone unnoticed by the authorities, which have brought in a raft of changes, including licensing schemes.

The result will be a step-change in the number of HMOs being registered – but is there a hidden issue here that doesn’t seem to be talked about?

An HMO has historically been considered as being worth less than a standard residential property, being valued up to 25% less.

Once designated as an HMO the local authority would resist the change back to residential because the new rooms within an HMO each count towards their precious number of available ‘dwellings’.

Indeed I used to do deals for clients where we’d buy a centrally placed property with an HMO use, then buy another in a less salubrious part of the same borough, transfer the use and hey presto, a significant uplift on the more valuable property was realised when a reversion to straight residential was granted.

Recently, I sat in front of a highly placed government official with some responsibility in the area of drawing up new legislation, and asked if the same rules would still apply, i.e. that change of use back to residential after a new HMO licence would be resisted – and they weren’t able to answer.

Anyone thinking of venturing into this area should carefully consider their options, or at least ask the right questions.

Losing a large chunk of capital value to gain a slightly higher yield might just be too high a price to pay.

Source: Property Industry Eye

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Advisers urged to help landlords with HMO licencing changes

Advisers need to help landlords who may be receiving letters from lenders about their mortgages due to HMO licencing changes, two lenders urged at FSE Midlands in Coventry today.

The changes are thought to mean 177,000 properties now require a HMO license.

David Whittaker (pictured), managing director of Keystone Property Finance, and Adrian Moloney, sales director at OneSavings Bank, highlighted how some landlords are already receiving letters from their buy-to-let lenders regarding properties which may now require a license.

Whittaker said: “Landlords are punch-drunk from the regulatory changes of the last few years.

“This is the law of unintended consequences in full effect and you would expect some common sense from lenders.

“Lenders should say that, as long as there are no changes to the property or that the landlord doesn’t want a further advance, that they can keep the loan.”

Before the Budget there was a suggestion that landlords might be able to get capital gains tax relief if they sold their properties to long-standing tenants.

Both Whittaker and Moloney were not surprised that this didn’t happen.

Whittaker said: “It was never going to fly. Anything that would line the pockets of landlords is not going to happen.

“HMRC and the Chancellor see the landlord community as a group that traditionally hasn’t paid its wedge.

“Landlords do not draw any empathy in the corridors of Whitehall.”

Moloney said: “If your investment is good why would you get rid of it?

“Sales of property investments have not been really picked up in the main by first-time buyers anyway, they’ve been picked up by other landlords.”

Source: Mortgage Introducer