Month: October 2024

The Salford selective licensing scheme in Langworthy, Weaste, and Seedley will officially end on 20 November 2024, impacting landlords with properties in these specific areas. This change requires HMO landlords, particularly those managing 3–4 bed properties, to take action to remain compliant under new licensing requirements. Without renewal of selective licensing in these designated neighbourhoods, small Houses in Multiple Occupation (HMOs) previously covered must now apply for an additional HMO licence to continue operating legally.

For Salford landlords, understanding and preparing for this transition will ensure compliance and protect against potential penalties. Here’s what this change means and how landlords can prepare.

Salford Selective Licensing Expiry and Its Impact on Landlords

Selective licensing was implemented to improve property standards, address tenant safety, and increase landlord accountability. By requiring a licence, Salford City Council could ensure that rental properties met baseline standards, particularly in areas needing improvement. However, as the selective licensing scheme in Langworthy, Weaste, and Seedley is set to expire without renewal, landlords of small HMOs (typically properties rented to three or four unrelated tenants) must now meet the requirements of an additional HMO licence to remain compliant.

This change impacts all small HMOs in these areas, as the council mandates that landlords comply with enhanced safety standards and management practices to maintain the quality of housing. Missing this licensing step could lead to enforcement actions, fines, or even an inability to rent the property legally.

Key Actions for 3–4 Bed HMO Landlords in Salford

If you’re a landlord with a small HMO in Langworthy, Weaste, or Seedley, here are the key steps to take now to prepare for the end of Salford selective licensing:

1. Apply for an Additional HMO Licence Before Expiry of Salford Selective Licensing

The Salford City Council requires landlords to apply for an additional HMO licence in place of the expiring selective licence. To ensure your property remains compliant, start the application process before 20 November 2024. This process involves providing detailed information about the property, its management, and its safety protocols, all of which help the council assess whether the property meets local standards.

2. Prepare for Council Inspections

Once you apply for an additional licence, the council may schedule a property inspection to confirm that it meets health, safety, and maintenance standards. To avoid delays or possible rejection, ensure that all aspects of the property, including fire alarms, electrical systems, and structural safety, are compliant with current HMO regulations.

3. Ensure Your Property Meets Updated Safety and Maintenance Standards

Additional licensing requirements often include stringent safety standards, from fire safety equipment to gas and electrical checks. Confirm that your HMO has well-maintained fire doors, working smoke alarms, and properly certified electrical and gas installations. These standards, which are critical for tenant safety, also help to avoid costly fines or penalties.

Compliance Services Available for Salford HMO Landlords

The end of Salford selective licensing brings new requirements that can feel complex, especially if managing multiple properties. Confidence Property is here to assist HMO landlords through this process with services that make the transition seamless:

• Application Assistance: We handle the additional HMO licence application on your behalf, ensuring it’s completed correctly and submitted on time.
• Inspection Representation: Our experienced team will attend council inspections on your behalf, addressing council questions and ensuring the property is fully prepared.

With our services, you can avoid the stress of the application process and stay compliant with local council regulations.

Benefits of Licensing Compliance for Salford HMO Landlords

Transitioning to the additional HMO licence brings numerous advantages to landlords, from legal protection to increased tenant satisfaction. Here’s why licensing compliance is beneficial:

• Reduced risk of fines and penalties: Complying with licensing requirements eliminates the risk of financial penalties due to non-compliance.
• Enhanced tenant satisfaction and safety: A licensed property with safety standards in place leads to a better tenant experience, reducing turnover and attracting reliable tenants.
• Improved property value: Properties that adhere to licensing standards often have a higher perceived value, which can positively impact market value and rental rates.

Preparing for Long-Term Compliance in Salford

Remaining up-to-date with licensing changes in Salford will benefit both landlords and tenants, ensuring that properties meet standards for safety and quality. As the selective licensing scheme concludes, landlords should start the transition to an additional HMO licence as early as possible. This not only ensures continuous compliance but also positions your property as a safe and reputable rental within the Salford market.

For more information on the council’s additional licensing requirements, you can visit Salford City Council’s HMO licensing page.

Confidence Property is ready to support you through each step of this transition, so you can focus on the quality of your property while we handle the compliance.

Whether you’re an experienced landlord or new to HMO Manchester Investments, Manchester offers abundant opportunities for high-yield property investments. The city’s diverse tenant base, demand from young professionals and students, and a thriving local economy make it an excellent choice for landlords. However, understanding the best areas to invest in is essential for maximising returns.

We’ve analysed the latest data from October 2024, including SpareRoom’s rental figures and Zoopla’s average sold prices over the last year for three-bedroom terraces—a common property type for HMO conversions. Using a five-bedroom HMO as an example, we’ve calculated gross yields, both before and after an estimated £100,000 refurbishment cost. Actual costs may vary, so make sure to get your own quotes.

Area	Average Monthly Room Rent (Q3 2024)	Average Sold Price (3-bed terrace)	Gross Yield (Excluding Refurb Cost)	Gross Yield (Including Refurb Cost)
Wigan	£553	£120,407	28%	15%
Oldham	£604	£135,714	27%	15%
Rochdale	£590	£136,986	26%	15%
Bolton	£561	£138,699	24%	14%
Bury	£584	£160,901	22%	13%
Salford	£699	£211,621	20%	13%
Manchester	£707	£221,474	19%	13%
Stockport	£643	£221,351	17%	12%
Cheadle	£680	£276,291	15%	11%
Sale	£647	£328,552	12%	9%

Key Areas for HMO Manchester Investment

Salford

Salford offers an ideal balance for HMO landlords, with its proximity to MediaCityUK attracting young professionals from media and tech industries. The area’s regeneration and transport links ensure steady tenant demand, and affordable property prices compared to central Manchester add to its appeal. Salford is great for investors seeking strong rental yields and long-term growth potential.

Ashton-under-Lyne

Ashton-under-Lyne provides landlords with affordability and strong tenant demand, driven by its transport connections to Manchester. This suburban area combines convenience and charm, appealing to both students and professionals. Spacious properties are more affordable here, making them ideal for HMO conversions, with ongoing developments supporting growth.

Bury

Bury is popular among tenants seeking suburban living and an easy commute. The area attracts professionals and families with its green spaces and shopping facilities. For landlords, Bury offers stable long-term returns with affordable property prices and high demand from those who prefer a quieter lifestyle with quick city access.

Failsworth

Failsworth is a great option for landlords seeking affordability and strong rental returns. Located 20 minutes from Manchester, this area appeals to young professionals and students who want a more budget-friendly alternative to central Manchester. Failsworth’s local amenities and transport links ensure high demand, providing solid returns for both new and experienced landlords.

Bolton

Bolton provides a cost-effective entry point for HMO investors, offering high yields and strong demand. Although it lacks direct Metrolink access, Bolton’s transport links by bus and train keep it well-connected to Manchester. The area is popular with professionals and families, ensuring rental demand remains steady, making Bolton ideal for long-term investments.

Rusholme

Rusholme is in constant demand due to its proximity to the University of Manchester and major hospitals, attracting both students and medical professionals. Due to Manchester City Council’s restrictions on new HMO conversions, investing here often involves purchasing properties with existing planning permission, which come at a premium but offer higher rental potential. Adding value through refurbishment or adding extra rooms can help offset these costs.

Planning and Licensing Considerations for HMO Manchester

Greater Manchester has strict planning and licensing regulations for HMOs, especially in areas like Manchester City Council, Salford and Trafford, which fall under Article 4 directions. This means converting properties to HMOs requires planning permission, making it more challenging for new applications. In these areas, it’s often best to purchase properties with existing HMO licences or a Certificate of Lawful Development. For more details, check out our article HMO licensing and planning.

Areas outside of Article 4 zones, such as Failsworth, Bolton, and Ashton-under-Lyne, offer more flexibility, with fewer regulatory barriers for HMO conversions. However, all HMOs must comply with safety and living standards, including fire safety measures and adequate facilities for tenants. Be sure to check the specific regulations for your area before investing.

The Role of Transport and Parking in HMO Manchester Investments

Transport links play a significant role in tenant demand, especially among young professionals and students. Properties near Metrolink stops or train stations are highly sought after. Areas like Salford, Failsworth, and Stockport benefit from excellent public transport, ensuring easy commutes to the city centre.

While transport links are important, parking can also be a bonus for attracting tenants who own cars. In our experience, most tenants don’t drive, but offering parking can still broaden your tenant pool. When selecting a property, try and avoid areas with double yellow lines outside, as this can limit parking and indicate a busy main road, which may deter tenants seeking quieter living environments.

Conclusion

Manchester’s HMO market provides excellent opportunities for landlords, with a range of areas offering strong yields and tenant demand. Whether you’re targeting affordable areas like Failsworth and Bolton, or more central spots like Salford and Rusholme, there are options to suit all types of investors. Keep in mind the local planning and licensing restrictions, and always consider transport links and parking, as these factors can significantly impact tenant demand.

If you’re thinking of buying a property to convert into an HMO, we’re here to help. For personalised advice about the best areas to invest in, click here to book a free HMO Q&A call. Let us guide you in making the right choice for your investment.

When converting or managing an HMO (House in Multiple Occupation), understanding the requirements for licensing and planning permission is crucial. Both are legal obligations, but they serve different purposes. Knowing which permissions apply to your property ensures compliance with regulations and avoids unnecessary penalties.

What is an HMO?

An HMO refers to any property that houses three or more unrelated tenants who share facilities such as kitchens or bathrooms. This arrangement is often used for student accommodation or shared housing for young professionals. While HMOs can offer higher returns than traditional rentals, they also come with increased regulatory scrutiny to ensure tenant safety and proper property management.

HMO Licensing Explained

Licensing is a legal requirement that focuses on the health, safety, and management standards of HMOs. Local councils use licensing schemes to ensure that landlords meet minimum standards for living conditions and tenant welfare.

1. Mandatory HMO Licensing

If your property is occupied by five or more unrelated tenants, you are legally required to obtain a mandatory HMO licence. This type of licence ensures that larger properties are managed correctly and that they meet essential safety and space standards, including fire precautions and adequate living conditions.

2. Additional HMO Licensing

In some areas, councils extend licensing to smaller HMOs through additional licensing schemes. This applies to properties with three to four unrelated tenants in areas where councils aim to improve housing conditions in the private rental sector. If your property is in an area with additional licensing, even small HMOs need a licence to ensure they meet safety standards.

3. Selective Licensing

Selective licensing is broader and applies to all rental properties, including single-family homes and smaller HMOs. This is typically introduced in areas with problematic housing conditions or high levels of anti-social behaviour. Under this scheme, landlords need a licence to ensure their properties are managed according to local standards. A selective licence is usually not required for a property that requires an HMO licence.

Planning Permission for HMOs

Planning permission deals with how the property is used and the impact it has on the surrounding area. While licensing ensures tenant safety, planning permission is concerned with the broader implications of an HMO on the local neighbourhood.

Small HMOs and Permitted Development Rights

If your property is being converted to a small HMO (3-6 occupants), you may not need full planning permission. Under permitted development rights, you can change the use of the property from a family home (C3 Use Class) to a small HMO (C4 Use Class) without requiring planning approval. However, it’s important to check local restrictions.

Large HMOs (Sui Generis)

If your HMO will house more than six tenants, it falls under the Sui Generis Use Class, which requires full planning permission. This is because larger HMOs are considered to have a greater impact on the local area in terms of noise, parking, and property management. Councils will assess these factors when deciding whether to grant planning permission.

Article 4 Directions

Article 4 Directions are used by local councils to limit permitted development rights. This means that in certain areas, you will need planning permission to convert a property into an HMO, even if it would usually fall under permitted development rights. Trafford is one such area where an Article 4 Direction has been introduced to manage the number of HMOs. Here, even small HMOs require planning permission to ensure neighbourhoods maintain a balance between family homes and shared accommodation.

In Salford, Article 4 only applies to specific areas, meaning that in some regions, small HMOs can still be established under permitted development rights without planning permission. It’s essential to check with the local council to determine whether your property is affected by an Article 4 Direction.

Conservation Areas and HMO Restrictions

If your property is in a conservation area, additional restrictions may apply when converting it into an HMO. Conservation areas are designated to protect the architectural or historical character of a neighbourhood, and councils may require planning permission to make changes, including converting a property into an HMO. The goal is to prevent changes that could negatively impact the appearance and character of these areas.

Greater Manchester HMO Licencing & Planning Requirements

Where available, click on the links below to go to the relevant council website

Borough	Article 4	Additional HMO Licensing
Bolton	No	No
Bury	No	No
Manchester	Yes*	No
Oldham	No	No
Rochdale	No	No
Salford	Partial	Yes
Stockport	Partial	No
Tameside	No	No
Trafford	Yes	No
Wigan	Partial	No

*MCC has a policy of refusing any planning applications for HMO conversions
Disclaimer: The information in this table is correct as of October 2024 – please check with your local council for current licensing and planning regulations.

The Importance of Compliance

Understanding the requirements for HMO licensing and planning permission is crucial, as non-compliance can lead to significant penalties. Councils have the power to issue fines of up to £30,000 per offence for unlicensed HMOs, or in some cases, take legal action resulting in unlimited fines. In severe situations, landlords may face criminal prosecution, and tenants can apply for Rent Repayment Orders, reclaiming up to 12 months’ rent.

Additionally, failing to obtain planning permission where required could result in enforcement action. Councils may issue enforcement notices requiring the property to revert to its original use, which can be costly. This is especially risky in areas where Article 4 Directions apply, as many landlords mistakenly assume they can operate under permitted development rights.

What Should Landlords Do?

To avoid penalties and legal issues, landlords must ensure they are fully compliant with both licensing and planning regulations. Here are some steps to take:

1. Check local council requirements: Confirm whether your area has additional or selective licensing schemes, and whether your property is affected by an Article 4 Direction.
2. Apply for an HMO licence: If your property meets the criteria for licensing, apply as early as possible to avoid fines.
3. Seek planning permission if necessary: Even if you have an HMO licence, you may still need planning permission, particularly in areas with Article 4 restrictions or conservation areas. We would always recommend engaging with a Planning Consultant or Architect.
4. Maintain compliance: Regularly check for changes in local regulations and ensure your property continues to meet safety and management standards.

For landlords looking to convert properties into HMOs or ensure they are meeting current regulations, working with experts like Confidence Property can help navigate the complexities of licensing and planning.