Change of Direction for Buy to Lets
York: picturesque, historic and diverse is a small city with a big heart. Toping a recent poll as the place in Britain most people would like to move to*, surrounded by stunning scenery and home to two universities, the district hospital, well performing schools, colleges and a sound local economy, York also boasts a wide range of housing stock to choose from.
From the city’s grand Georgian town houses to more modest red brick terraces. The solid suburban dwellings of the 1930’s and contemporary apartments lining the rivers Foss and Ouse, or on rejuvenated brownfield sites within the city itself. If you’re looking for a family home or buy to let investment you’re spoilt for choice.
With current low interest rates for cash deposits and York’s let properties rental rates the highest in Yorkshire - ranging from £531 per month for a one bedroom flat to £801 for a three bed house – this can equate to a return in the region of 5%. Combine this with a steady demand for rented accommodation in the shape of students, medial staff and city workers, and York is an attractive prospect for buy-to-let investors.
However, if you are considering this option it’s worth noting proposed planning law changes by City of York Council that has recently given notice of an Article 4 Direction. Affecting the whole of the City, Article 4 seeks to counteract a perceived issue of areas with a high proportion of houses let to three or more non-related persons – often termed ‘student lets’.
Instigation of the Directive will mean that if a property has not previously been let to three or more non-related persons before 20th April 2012, planning permission for a ‘change of use’ will be required after that date. The Council are currently undertaking a consultation period but if the Article 4 Direction is brought into force then it is likely to have a dramatic effect on York’s rental market. And York is not alone - Article 4 Direction has already been introduced by Leeds City Council in Headingly.
With this in mind, properties with a tenant(s) already in situ are likely to attract a premium to investor buyers. Whereas buy to let property purchases requiring a planning change of use will become more uncertain and protracted, possibly leading to a drop in available lets and fuelling an increase in rents chargeable.
So, if you are thinking about buying an investment property in one of Britain’s top cities my advice is act now and ensure it is bought and let before the Article 4 Direction is confirmed and comes into force.
For further information on Article 4 Direction visit: http://www.york.gov.uk/environment/Planning/article4/
*Source: Mail Online 5th July, 2011