buy to let mortgages

Mortgages for HMO Property

Information on this site is for information purposes only. It is not intended as investment advice

Unlock the Potential of HMO Property Investment with Mortgages Direct

Are you looking to maximize your rental income and tap into a high-demand sector of the UK property market? Investing in a House in Multiple Occupation (HMO) could be the smart move you’ve been searching for.

What are the Benefits of Investing in an HMO?

HMO properties are increasingly popular with investors, and for good reason:

Higher Rental Yields: HMOs typically generate significantly higher rental income compared to standard buy-to-let properties. By letting individual rooms, you can achieve a greater overall return on your investment. For example, a property rented to multiple individuals often yields a much higher total monthly income than if rented to a single family.
Reduced Void Periods: With multiple tenants, the risk of losing all rental income due to vacancies is significantly lower. If one tenant moves out, the others continue to provide income, offering greater financial stability.
Strong and Growing Demand: In many areas, particularly cities and university towns, there’s a consistent and growing demand for affordable shared accommodation, making HMOs a reliable investment. This demand is driven by factors like housing affordability and the increasing number of people seeking flexible living arrangements.
Diversified Income Streams: Relying on multiple tenants for your rental income provides a more secure and diversified revenue stream compared to a single tenancy.

Ready to Capitalize on the HMO Market?

Finding your way round the world of HMO mortgages can be complex, with specific criteria and regulations to consider. That’s why you need an expert on your side. At Mortgages Direct, we offer some distinct advantages:

As a whole of market mortgage broker, we aren’t tied to a limited panel of lenders. This means we can search the UK mortgage market to find the best HMO mortgage deals for your specific needs. We have access to a wide range of lenders, including specialist providers who understand the unique aspects of HMO financing.
No Broker Fees (on mortgages of £100k or more): That’s right! For HMO mortgages of £100,000 or more, you won’t pay us any broker fees. We are committed to providing you with expert advice and securing the right mortgage without adding extra costs to your investment. Our earnings come from the lender upon completion, ensuring our focus is solely on finding the best solution for you.
Expert Guidance: HMO mortgages often have more stringent criteria than standard buy-to-let mortgages. We have the in-depth knowledge and experience to guide you through the application process, ensuring you meet all the necessary requirements and avoid unnecessary delays. We understand lender criteria regarding property type, number of tenants, licensing, and your experience as a landlord.
Streamlined Process: We handle the complexities of the mortgage application, from initial consultation to completion, saving you time and effort. We work closely with lenders to ensure a smooth and efficient process.

Mortgages for HMO Property.

Let Mortgages Direct help you in unlocking the potential of HMO property investment. With our whole of market access and no broker fees, you can be confident you’re getting a great deal and expert support. Contact us today for a free, no-obligation consultation to discuss your HMO mortgage needs.

Is your property a HMO

If you are letting a property to more than two tenants then there is a possibility that the let property will need to be licensed as a House in Multiple Occupation (HMO) If you are buying a HMO then you will need a mortgage that is suitable for a house in multiple occupation The licensing of let properties was introduced under the Housing Act 2004. Mandatory HMO licensing began on April 6th 2006. From July 3rd 2006 all liable landlords who have not applied for a licence will face enforcement action which can include fines up to £20,000. A property is classed as a HMO if it satisfies all of the following:

A house or flat that is let to 3 or more tenants
At least 2 of the tenants are unrelated
The tenants share facilities (kitchen, bathroom etc)

If you intend to let the property to one family then HMO licensing will not apply

Does your property need a HMO licence

Check with your local authority as different councils have different requirements Mandatory licensing will be required if all the following circumstances apply:

A house or flat that is let to 5 or more tenants
At least 2 of the tenants are unrelated
The tenants share facilities (kitchen, bathroom etc)
There are at least 3 floors to the property

A separate licence is needed for each property. A licence cannot relate to more than one property. You cannot transfer a licence to another person. A landlord can nominate someone else to be the licence holder however that person needs to be a fit and proper person for the task, for example a building manager or agent. The local authority will be responsible for licensing.

What are the minimum standards required for a HMO licence?

The applicant must be a fit and proper person. The local authority will seek to establish whether the applicant has any unspent criminal convictions. Or whether there has been any history of problems relating to housing or the letting of housing. The property will need to satisfy the local authorities standards. These standards will vary between local authorities.

HMO and buy to let mortgages

HMO will be an issue with buy to let lenders. Think about how you intend to let your property. If you intend to let the property as a HMO then you will need a mortgage that permits this arrangement. Please discuss with your mortgage advisor.