Cardiff HMO market set to become a closed shop

Cardiff Council’s latest policy proposal, outlined in the Cardiff Replacement Local Development Plan (RLDP), is set to bring significant change to the Cathays and Plasnewydd (Roath) rental markets.

If these proposals go ahead, planning applications to change the use of any property to a House in Multiple Occupation (HMO) in the two areas will be rejected if it results in there being more than 20% HMOs within a 50-metre radius of the property – effectively closing the door on future student lets in the areas, particularly in Cathays.

For years, landlords have successfully converted C3 family homes into C4 (3-6 sharers) and HMO Sui Generis (7+ sharers) properties. However, the new policy will impose a strict limit, meaning the opportunity to develop will soon be extremely limited.

The key policies landlords may be interested in are:

Policy H5: No new HMOs can be created in Cathays and Plasnewydd (Roath) where it would lead to over 20% of properties within a 50-metre radius being HMOs. As Cathays is already far above this threshold in most – if not all – parts, this is effectively a total stop on new HMOs, overriding previous successful appeal cases against Cardiff Council’s prior attempts to enforce this limit through their Supplementary Planning Guidance (SPG). We expect applications to go from ‘C4’ to ‘HMO Sui Generis’ to continue to be accepted.

Policy H6: No new Purpose-Built Student Accommodation (PBSA) will be allowed outside of the City Centre and Cardiff Bay business areas. We question whether this is the best approach, as it restricts the redevelopment of brownfield and commercial premises that may no longer be fit for purpose in other parts of the city.

Policy EC6: Office buildings in the City Centre and Cardiff Bay business areas must remain empty for two years before a change of use will be considered.

These policies could significantly reshape the student accommodation market in Cardiff for years to come, as they will last until 2036. We strongly encourage landlords to voice any concerns in response to the RLDP consultation and ensure their views are heard. The consultation closes on 15th April 2025 and you can find information on responding on the Consultation Page.

Concerning news for owner-occupiers

The proposed changes would see Cathays owner-occupiers' ability to sell to landlords for the best value restricted. As a result, we anticipate that some will list their homes for sale in the coming months, keen to secure a sale before their window closes.

If you’re looking to add to your portfolio, now is the time to act. Keep an eye out for new listings, or contact me to discuss potential opportunities.

Positives for current HMO landlords

On the flipside, it’s encouraging news for those who already own HMOs, as a restriction on increased competition could drive up rental values.

For more information or to register your interest, call me on 02920 574732 or email rhys.owen@cpshomes.co.uk.

10 March 2025

The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.

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