OXFORD City Council has lost its High Court challenge to Government planning policy on student homes and bedsits.

Last month, the Government changed planning laws to allow homeowners to convert properties into shared homes – known as houses of multiple occupation (HMOs) – without planning permission.

But the city council joined with other authorities to challenge the move, arguing the Government had not carried out the correct consultation.

However, a High Court judge has ruled in the Government’s favour.

The city council’s deputy leader, Ed Turner, said it had been right to pursue the issue, which could cost it up to £4,000 in legal fees.

He said planning powers were needed to halt the spread of HMOs, particularly in areas such as East Oxford.

Mr Turner said: “We wanted to leave no stone unturned in trying to get the ability to manage things better and create balanced communities.”

In a separate issue, the council has amended its new HMO licensing scheme – aimed at improving the standard of private rented houses – to ward off the threat of High Court action from city landlords who have claimed they would not be able to get a licence in time.

Changes mean the scheme, due to begin this month, has been pushed back until the New Year. Larger HMOs will be licensed by the council from January 2011.

Landlords with smaller HMOs – flats or two-storey houses with four or fewer tenants – will not require licences until January 2012.