HMO Buy to Let Mortgages
Maximise your investment return with a house of multiple occupation
Investing in a house of multiple occupation (HMO) offers the potential for higher rental income than a traditional buy-to-let. However, the nature of HMO properties means they typically require additional licensing, compliance with specific regulations, and management considerations. For this reason, you’ll need a specialist HMO buy-to-let mortgage to take advantage of this investment opportunity.
The good news is that the availability of specialist HMO mortgages has increased in recent years. However, while financing is more widely available, selecting the right product is crucial to maximise the investment return. Couple this with the fact that an HMO mortgage is more complex than a standard buy-to-let mortgage, and it pays to enlist an expert.
Finding your HMO buy-to-let mortgage
With our experience in the HMO buy-to-let mortgage market, we can help you secure a mortgage to realise this lucrative investment opportunity. Whether you’re looking to invest in student accommodation, a shared house, serviced accommodation or employee accommodation, we can assist.
Once we’ve gathered the necessary information on your objectives and financial position, we’ll source the lenders best suited to your property investment plans. As we’re whole-of-market, we’ll have access to and can recommend the most suitable products. When you’re ready to invest, we’ll guide you on your options and take you through the application process.
To get your HMO investment underway, get in touch for a free, no-obligation chat with an HMO buy-to-let mortgage adviser.
HMO Buy to Let Mortgages FAQs
Who is eligible for an HMO mortgage?
Most lenders prefer applicants with experience in property management or landlord experience. You’ll usually need to demonstrate at least 12 months of experience. As well as property experience, you’ll need a good credit history and proof of stable income.
The property you wish to mortgage must also meet specific standards and regulations, including necessary licenses.
Lending criteria differ from lender to lender. We can identify the lenders most suited to your circumstances and requirements.
How is an HMO mortgage different to a standard buy-to-let?
An HMO mortgage differs from a standard buy-to-let mortgage due to the nature and complexity of the property. HMO mortgages are seen as higher risk because of several factors, including the following:
- HMOs often require specific licensing from local authorities, which can involve stringent safety and management standards.
- While the overall rental income for an HMO can be higher than for a single-tenancy property, it’s also more variable.
- Multiple tenancies make the property usage more complex.
- Managing an HMO is more intensive due to the needs of multiple tenants.
- HMOs carry higher financial risks, including higher maintenance costs, potential void periods, and regulatory non-compliance risks.
How much can I borrow on an HMO mortgage?
Most lenders will lend a maximum of 80% of the property’s value. Lenders will consider the potential rental income, property valuation, and the landlord’s financial position when determining the loan amount. The usual minimum loan amount is £100,000.
What deposit will I need for an HMO mortgage?
You’ll need a minimum 20% deposit for an HMO buy-to-let mortgage. Some lenders have more stringent requirements, offering much lower loan-to-values and requiring a higher deposit.
