Essential Guide to Investing in Article 4 HMO Areas Manchester

It’s no secret that Manchester has become a major hotspot over the last few years, with a current growth rate of 0.76% annually.

The population is set to expand even further, with many moving to the culturally rich city to enjoy the famed sport, buzzing nightlife, and lower cost of living than some areas in the South. In fact, according to a recent YouGov survey, Manchester is the top-rated city to replace London as the capital. 

For those investors who are looking to get into the action, choosing a property can be a smooth process. That is if you’re looking at property styles that don’t include HMOs.

If HMO’s are more your vibe, there’s something to consider before leaping in…the Article 4 regulation.

In this guide, we’ll cover everything you need to know, including:

• What is Article 4?
• Article 4 HMO areas Manchester – What areas are included?
• Is Investing in Article 4 HMO areas possible?
• Factors to Consider Before Investing in Article 4 HMO Areas
• How to improve your chances of being approved for an Article 4 HMO Manchester-based

*Please note this blog does not constitute investment advice. Conducting your own due diligence and being aware of risks before making any investment is key.*

Understanding the Article 4 Regulations: What is Article 4?

An Article 4 Direction is a legal process which a council can use to remove particular types of permitted development.

In Manchester, the council must grant you planning permission when changing your rental property from a typical home for a single household to a small HMO (Houses in Multiple Occupation.)

A HMO refers to a property housing individuals who aren’t related and are from different households. These people share a toilet, bathroom, or kitchen facilities with their housemates. This setup is entirely different from a traditional household which involves people who are married or in a relationship, relatives, step-children/step-parents and guardians etc.

Under Manchester City Council, the following type of house is classed as a small HMO:

“A house lived in by three or more but fewer than seven people as a House in Multiple Occupation (HMO) using the definition of a HMO set out in s254 of the Housing Act 2004. I.e. people who do not form a single household but who share one or more basic amenities.”

But be aware, if you’re planning to turn your rental property into a HMO with more than six residents, this falls under a different type of Use Class, and you will also need planning permission to use your house in this way.

If you’re unsure about the Article 4 Direction or if you have a specific issue, it’s best to contact the Manchester City Council in the first instance.

Article 4 HMO areas Manchester – What areas are included?

The Article 4 Directory covers the whole of the Manchester City Council constituency, Salford Council and Trafford Council.

When you know which area the property is in, the one you’d like to turn into a HMO, you should either contact the relevant council or consult with a specialist planning consultant who has experience on the subject. This will give you the best chance of getting an application approved.

In the past, we have found the council are generally most concerned with the areas which are already showing a very high concentration of shared housing. In Manchester, this includes postcodes like:

M14 – Fallowfield

M20 – Withington, Old Moat

M12 and M13 – Ardwick

M15 – Hulme

M19 – Levenshulme

These highly concentrated areas may be more difficult to gain the necessary planning approval needed to turn your property into your desired HMO.

Is Investing in Article 4 HMO Areas Possible?

As the whole of Manchester, majority of Salford, and the Trafford area are under the Article 4 HMO Regulations, there will be some applications that are accepted and some that are not.

However, there are some pockets in Salford which fall outside the Article 4 map  such as Walkden, Swinton, Little Hutton.

Some wards are open for procurement, but there is no guarantee on which will be approved. You must also be fully compliant with Manchester’s Development DM1 policy. 

Factors to Consider Before Investing in Article 4 HMO Areas

• Location

Location, location, location. This is absolutely key to any planning application.

In 2023, a Manchester-based property that could perform well as a HMO is one that has a high demand for that property style and low levels of competition.

Not only could this increase your chances of finding tenants, but potentially help your application to be viewed more favourably by the local council.

Some areas that may fare well with HMOs are those that are commutable to the city centre or local hospitals and universities.

Some of our favourite investing areas in Manchester are:

The North West has become a lucrative area, with a good mix of countryside living and city centre luxe.

As North West property specialists, here at Forth Action Invest, these are our top picks on the best buy-to-let areas in Manchester for landlords:

• Manchester City Centre [Deansgate, Green Quarter, Northern Quarter, Ancoats or New Islington]
• South Manchester [Chorlton, Didsbury, Levenshulme]
• Salford [Eccles, Swinton, Little Hulton, Walkden]
• Tameside [Ashton-under-Lyne, Hyde, or Dukinfield]
• Trafford [Urmston, Sale, Stretford]
• Prestwich 

To learn more about our best buy to let areas in greater detail, alongside key statistics and rent prices, read our full article here.

• Market Demand

It entirely depends on the market and time of application, but some councils may approve your application if there’s a strong demand for that type of property.

Conducting thorough market research is a great way to determine the properties already in your chosen area and the types of renters.

It’s important to note that the council may consider other factors in addition to the market demand, like the impact on the local community and the quality of the HMO property.

• Property Condition

While the condition of the property and potential refurbishment costs is always a consideration for property investors, you may have to focus on this more so within an Article 4 area.

The local council will inspect the property to ensure that it meets the minimum requirements for HMO properties like fire and safety measures, adequate space, ventilation, and more. 

The condition of the property can be considered within the application too, as a poorly maintained property can pose health and safety risks for tenants.

How to improve your chances of being approved for an Article 4 HMO Manchester-based

• Look at previous planning applications

Planning applications are public at all councils throughout the UK. This serves as a great opportunity to see what has previously been accepted or denied by the Manchester City Council.

You can even enter the postcode of the area you’re looking at investing in to see if others have had a HMO approved or what the changing landscape may look like over the next few years.

• Check how many HMOs are in the area

This relates to the density of HMOs in the area. It’s not always correct, but the council may be more accepting of your desired HMO if it’s in an area which isn’t currently overtaken by others.

During your research, you may find HMOs that are currently for sale. Buying an existing HMO means you won’t have to go through the change of class as it’s already operating in that property style.

You will, however, need to change the HMO license into your name, so remember to collect as much paperwork as possible from the old landlord showing the property being used as a HMO.

• Speak with an expert

Consulting a local planning consultant is a surefire way to gain further insight into whether your application could be approved or not.

If it’s not looking so positive, the consultant can provide you with tips on how to increase your chances of being successful. These people also often have a good relationship with the local authorities and are acutely aware of what’s usually approved.

Are you choosing Manchester as your investment location?

Investing in Manchester and the North West is an opportunity to get ahead of the rest, as the city is facing a rise in attention since Covid-19.

Whether you’re potentially investing in HMOs or if you’re looking for unrivalled and off-the-market opportunities, we are North West property investment and development specialists.

By partnering with us, you’ll have seasoned experts walking you through each step – or simply helping to find great deals within the North West area.

To learn more about our hands-free property investment services, chat with us today.

*Please note this blog does not constitute investment advice. We recommend you conduct your own due diligence before making any investment.