Existing landlords with student accommodation Leicester could be in line for major benefits once a new law is introduced.

An Article 4 Directive will come into force in Leicester on 20 August 2014, which could pave the way for greater demand for student rentals, increased prices and even greater sales potential as investors seek to buy existing student properties.

Leicester’s local authority has made the controversial decision to introduce the Article 4 Directive, which means that many more landlords will have to apply for planning permission to convert a current family home into what is known as a House of Multiple Occupation (HMO).

This has not previously been needed, because since October 2010 landlords have been free to convert properties housing between three and six unrelated tenants under permitted development rights. The council has decided to change this, however, in a bid to prevent an over-saturation of these HMOs in certain areas of the city. The Article 4 Direction will only apply to these areas.

A full list of the places affected by the direction is available on the city council website, and anyone who thinks their property may be affected is advised to contact the authority’s Development Management Team for more information. The regulations were first announced nationally on 1 October 2010, but it is only now that they will be brought into force in Leicester.

The move will mean that the numbers of available student lets are unlikely to increase rapidly in popular areas in the future, which is good news for existing landlords who are already letting out their HMOs or are planning to do so in the near future. The growing demand from the two popular universities in the area is likely to prompt a boost to rental incomes.

As current shared properties will not be affected by the direction, it will also be a boon for those landlords looking to sell on and see a return on their investment and for those looking to buy into a market where demand could soon outstrip supply.

Tenants already living in HMOs will not be affected by the new ruling, nor will those living in purpose-built multi-occupancy properties or larger buildings, where planning permission should already have been obtained. The order will also not apply to family members living together.

Landlords of existing HMOs are being asked to register their properties with the local authority to keep track of those that were multi-occupancy before the direction comes into force. The registered properties must already be in shared occupancy, as landlords cannot register buildings which they intend to use as a HMO in the future.

If you are a landlord of student accommodation Leicester and want more information about the changes in HMO licensing, contact Keywest on 0116 254 4555.