Housing Minister Grant Shapps has announced that councils will now have much greater flexibility to manage concentrations of shared housing in their specific areas.

These latest changes have been announced in response to the controversial legislation belatedly introduced by the previous Labour government in April of this year. The British Property Federation (BPF), Residential Landlords Association (RLA) and the National Landlords Association (NLA) had all lobbied extensively prior to the election for the legislation to be repealed.

Councils will now have the freedom to choose the areas where landlords must submit a planning application to rent their properties to unrelated tenants in Houses in Multiple Occupation (HMOs).

The aim of the new legislation is to enable high concentrations of HMOs to be controlled in locations where local authorities decide that related problems are occurring.

It is estimated that as many as 8,500 planning applications could be submitted each year if every landlord looking to turn their property into a HMO is first required to seek permission - instead, councils will now be able to focus their efforts on to those particular neighbourhoods where HMOs present a problem, while landlords of HMOs in other areas will not be tied up in red tape.

However the definition of a small HMO (the C4 use class) will remain but permitted development rights will now be extended to allow all changes between the C4 and C3 classes, without the need for planning applications.

Any change of use between dwelling houses and small HMOs will be able to happen without planning permission unless the local council believes there could be problem with such development in a particular area.

Shapps said: "Councils know about local issues with shared homes, and dont need top-down rules from Whitehall to deal with problems that dont exist. Where too many shared homes are causing problems for other residents or are changing the character of a neighbourhood, councils should be able to control their spread. But Im not going to create unnecessary costs for landlords, which puts the supply of rented homes at risk.”

"Thats why Im giving councils the power to decide whether to use the planning system to control the spread of shared housing where it is a problem. This will give them the flexibility to make decisions that are right for their communities, rather than stifling the rental market with unnecessary costs and red tape.

"Shared homes ensure people who want to live and work in towns and cities can do so, and they are vital to the economy. These changes will safeguard the supply of shared housing where it is needed without burdening landlords with cumbersome red tape - but will also hand councils the flexibility they need to tackle problems where they occur."

Liz Peace, chief executive of the BPF, said: "Grant Shapps has taken quick and decisive action after this law was rushed through in April without sufficient clarification. At a time when council resources are scarce and housing is needed it makes no sense to be forcing thousands of local landlords and planning officers to be engaged in unnecessary bureaucracy. The Minister said recently that deregulation would characterise his approach to the private rented sector and as with other moves to cut red tape, these are further welcome steps."

David Salusbury, chairman, NLA said: “It is clear this Government understands the contribution that landlords make to providing decent and affordable accommodation across the UK. Unnecessary costs and red tape only serve to detract from this core activity and we welcome moves to tackle such disincentives to further investment.

“The change in the law for shared housing was rushed. As a result, its implementation by councils has created uncertainty and confusion. We are pleased to see the new Government responding to calls to rethink these unnecessary planning burdens on landlords.

“It is important local authorities continue to engage with landlord organisations to help tackle the problems associated with some HMOs, rather than trying to impose rules across the board which seriously limit this much needed form of housing.”

Alan Ward, RLA chairman, said: “The prospect of 8,500 planning applications clogging up the town hall system made a nonsense of landlords’ and tenants’ rights to choose who may live in a house. The measures were ill-considered and would have had a universal effect on the private rented sector when they were trying to control a problem in a limited part of the student market.

“We thank the minister for keeping a pre-election promise and look forward to the consultation process to see how new regulations can be applied appropriately in local circumstances.

“Most landlords will be able once again to exercise their right to let to a group of, say, three nurses wanting to share a house, without having to ask permission from the local authority.”