Article 4 Direction: Changing the Use of a Property

Homeowners can normally turn a family home (Class C3) into a small HMO (Class C4) without planning permission. An Article 4 Direction takes that right away in a council's area, so the change needs the council's approval first.

For landlords who buy property investments to rent as HMOs, that means planning ahead in any area where a direction is in place.

Article updated: July 2026

What is an Article 4 Direction?

Article 4 Directions are the legal means by which a local authority can require property owners to seek permission to convert a single dwelling house into a small HMO. The idea is to give councils more control over housing stock. A direction lets a council control the number of HMOs in a given area. In conservation areas, it also lets the council consider how any development, not just an HMO, might affect the character of that area.

For instance, Manchester City Council, who have an Article 4 Direction in place, describe their policy,

H11 of the Council's Local Development Framework Core Strategy sets out the approach which we will take towards controlling further HMOs. In general, we would be unlikely to let you change your property into an HMO if there are a lot of other shared houses nearby

Historic England describes Article 4 Directions as having the ability to

increase the public protection of designated and non-designated heritage assets and their settings.

Permitted Development Rights and Property Use-Classes

Local authorities need Article 4 Directions because homeowners have permitted development rights under The Town and Country Planning (General Permitted Development) Order 1995. One of those rights lets an owner change a family home (Class C3) into a small HMO (Class C4) without planning permission. An Article 4 Direction, therefore, withdraws that right (pending local authority approval) that would otherwise be protected by the GDPO.

For HMOs, Article 4 Directions only apply to a change of use to a smaller HMO or Class C4 property. Larger HMOs fall under a different house class and require different permissions. Property use classes are set out in the Town and Country Planning Order, 1987.

For the bigger picture on this strategy, see our complete guide to investing in HMOs.

So, What's Really Going On?

Councils use Article 4 Directions because too many HMOs in one area can put pressure on both the housing market and the community. They also use them to protect areas of local interest. The Residential Landlords Association argues that the directions put more pressure on an already limited supply of affordable housing.

And yet, what about young people and what does this mean for student areas? Article 4 Directions directly impact landlords who wish to rent out their properties to groups of between 3 and 6, unrelated people and it is mainly students and young people who choose such living arrangements.

The Residential Landlords Association point out that the arguments for this kind of regulation began from a position of unease that some felt about the 'Studification' of some areas. The argument being, essentially, that young people living together in small groups, make bad neighbours and therefore such living arrangements need to be curtailed and controlled.

But is it the right approach to try and deal with social problems through planning law when these could be dealt with by environmental health policy or the police?

The RLA take this even further, arguing that Article 4 Directions actively discriminate against students and young people who want to live in small groups.

Each council chooses whether to make a direction, and has to consult local communities on it. Even so, many councils have made their own.

The Effect of Article 4 Directions on Local Markets

In Article 4 Direction zones, houses approved for use as a small HMO (Class C4) sell at a premium to matching family homes (Class C3). Those C3 homes have seen slower capital growth.

Students need places to live and in many cities, there simply isn't enough purpose-built accommodation to house them. Granted, so-called student ghettos can be problematic for local residents where six people to a house can cause problems with undermining community cohesion to parking to anti-social behaviour.

But, simply limiting the number of small HMOs that are available does nothing to decrease the demand that exists for them and when you have that disconnect between supply and demand, prices go up.

As is well described in the article entitled, 'HMO investment: the impact of Article 4' we are seeing in cities that have Article 4 Direction zones that investors are much more cautious about buying C3 houses to convert into C4s.

The price gap between C4 and C3 houses comes down to two factors. Not only are the C4 houses more desirable for investors due to their capacity for rental returns but C3 houses are less desirable, in that an investor's ability to add value to these properties is hampered. And less investor activity in the C3 housing market means slower capital growth for normal homeowners.

Fewer HMOs leave students and young people with fewer places to live.

All this while the problems associated with student ghettos, that Article 4 Directions are supposed to address, are still very much on display in our cities.

Article 4 Use Differs From Council to Council

There is no single national approach to how Article 4 is applied, and the reasons councils have for using it vary a great deal, so its effects cannot be described in broad strokes.

It would be hard to argue that the problems that Article 4 Directions are supposed to address are not real. Student populations rise year-on-year and in most of our cities, there are areas that feel abandoned during the holidays and can be chaotic and unkempt during term times. One can only imagine that such places must often not be too pleasant to live in for normal homeowners and their families.

Local student-accommodation supply differs by city. Some councils and universities support purpose-built student accommodation, while traditional HMOs remain part of the student housing mix. Local planning pipelines, enrolment, occupancy and rents are needed to establish the balance between supply and demand in a particular market.

Takeaway Points for Investors

Six points sum up how Article 4 Directions affect HMOs:

1. It's important not to confuse a change of use with physical changes to the building. Article 4 Directions apply to how a property is being used, not to physical changes to the property. There are exceptions to this, however. Article 4 Directions can be used to require planning permission for the demolition of a non-designated heritage asset by removing demolition rights under part 11 of the GDPO.
2. It is equally important to understand what the definition of a small HMO (a Class C4 House) is, as this is where an Article 4 Direction will apply. Under Section 254 of the Housing Act 2004, an HMO is a house lived in by 3 or more people who do not form a household but who share amenities. HMOs with more than 6 people fall into a different class and there are additional permissions that are required.
3. Once a property has been re-designated as an HMO it can be used as a family home without the homeowner seeking permission to do so. However, once it has been a family home the homeowner must re-apply for planning to convert it back into an HMO.
4. The strategy of taking a residential property in order to turn it into a small HMO is a much more difficult proposition than it once was. Approach with caution.
5. For the student market, PBSA is one strategy to compare with traditional HMOs. The amount of existing and planned purpose-built stock, its occupancy and its rents differ by location.
6. A small HMO needs planning, licensing and tenant demand to line up. A problem with any one of them causes trouble for the whole plan.

What You Need To Do

Check your council's website to see whether an Article 4 Direction covers the property's street before you make any definite plans. Where one applies, a small HMO conversion needs the council's approval first. The council's answer on the conversion affects the rent the property can earn, which is a big part of working out whether buy-to-let is worth it.

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