Specialist mortgages for Houses in Multiple Occupation, designed for landlords maximizing rental yields through multi-tenant properties. Our Walsall-based service connects you with specialist lenders who understand the West Midlands property market.
HMO (House in Multiple Occupation) finance is a specialist lending product designed specifically for properties let to multiple unrelated tenants who share facilities. HMOs typically generate higher rental yields than standard buy-to-let properties, but require specialized financing due to their unique characteristics and regulatory requirements.
Our HMO mortgage solutions come from lenders who truly understand the HMO market and its potential. Whether you're purchasing your first HMO or expanding an existing portfolio, we can access products that take into account actual rental income rather than applying standard stress tests that don't reflect HMO returns. Many high street lenders won't touch HMOs, but our specialist panel actively seeks these opportunities.
We work with landlords at all experience levels, from those converting their first property into an HMO to experienced portfolio landlords with multiple HMO properties. Our advisors understand the licensing requirements, rental calculations, and property standards needed for HMO success, and can connect you with lenders whose criteria match your specific situation.
For mortgage purposes, an HMO is typically defined as a property let to three or more unrelated tenants who share kitchen, bathroom, or toilet facilities. However, lender definitions can vary, with some classifying properties with 4 or 5 bedrooms as small HMOs and 6+ bedrooms as large HMOs. Properties requiring mandatory HMO licenses (5+ occupants in 2+ households) may have different lending criteria.
While HMO experience is preferred, many lenders will consider first-time HMO landlords if you have general buy-to-let experience. Some lenders have specific 'first HMO' products with slightly lower LTVs (typically 70-75%). You'll generally need to demonstrate property management capability and understanding of HMO regulations. Completely novice landlords may find options limited.
HMO lenders typically use actual room rents rather than applying a standard stress test. They'll assess the rent per room multiplied by the number of lettable rooms, often applying a void assumption (usually 8-11% to account for turnover between tenants). Some lenders require minimum rental coverage ratios of 125-145% of the mortgage payment to ensure affordability.
Yes, most HMO lenders will finance properties requiring licenses, but they'll want evidence that the license is in place or has been applied for. Properties must meet HMO standards including room sizes, fire safety requirements, and amenity provisions. Some lenders will advance funds for properties not yet licensed if you're undertaking works to bring them up to standard.