hmo mortgages

HMO Mortgages

You’ve found the right property, now you need to find the right mortgage

What is HMO Mortgages?

HMO refers to a “house in multiple occupation”, typically rented out room by room to individual tenants. HMO mortgages are a specific commercial loan to suit this type of property.

HMOs are generally occupied by more than three tenants, not forming a household, who will share kitchen, bathroom and toilet facilities in the house. Each tenant will pay the landlord their rent individually. HMOs are usually restricted in their operation under planning and local authority regulations.
Mortgages for HMO properties are available, but are not widely available and are offered by specialist lenders who understand this market niche.

hmo mortgages

Defining HMO

  • A HMO consists of one or more accommodation units, which are not self-contained apartments. Occupants are not a single household, and will not be related, and rent the space as their main or only residence.

  • HMOs will usually have shared kitchen and bathroom facilities, for the use of all occupants. Each HMO occupant will, individually, pay rent to the landlord of the property.

  • Landlords will often provide services such as utilities within the rental charged. Depending on the local authority where the property is located, and the size of the property, they may need a licence to operate the HMO.

HMO mortgage opportunities

Typically, HMO mortgages will be arranged via a limited company that owns the property or properties. GPS Financial has expertise in this area of specialist lending, having access to niche lenders specifically providing HMO mortgage funding. HMO mortgages can support a range of properties, including:

  • Student accommodation
  • house-shares for young professionals
  • DSS house-share
  • Company portfolios

Landlords of HMO properties may need to acquire a licence from their local authority if they have more than three tenants, who do not form a household, and who share kitchen, bathroom and toilet facilities.

How can GPS Financial help?

HMO properties are attractive to landlords, as they can deliver strong rental yields. However, the market for mortgages to fund HMOs has become increasingly difficult, as lenders drew back from a perceived risky sector.

GPS Financial has long experience in arranging HMO funding, mortgages and remortgages, with access to specialist lenders offering:

  • Up to 85% loan to value (LTV)
  • Rates from 3.8% above the base interest rate

How to apply?

Once you have identified the project and roughly worked out viability, costs, end value and profit margin, get in touch on 02922 677 725, or fill out the form in the contact page. It doesn't matter if you don't already own the land/property.

We will then ask you lots of questions, (known as a fact find), to get as much information about the development as possible. This will allow us to appraise your project and give you an honest opinion as to whether we can help, i.e. we'll let you know if there are any lenders who might be willing to provide the necessary finance.

Our Lending Partners