Which Type of HMO is Yours?
Houses in multiple occupation (HMO’s) fall into two distinct segments from the perspective of a mortgage lender:
- HMO properties that require an HMO licence granted by the local council (discussed on this page). Generally speaking this relates to properties that are let to 5 or more tenants and they form 2 or more households over 3 or more storeys and they share a bathroom, kitchen and toilet.
- HMO properties that DO NOT require a HMO licence. Please visit our dedicated page on these properties. These properties are generally let to 3 or more tenants and they form 2 or more households and share a bathroom, kitchen and toilet
You will see in the definitions above that the main criteria are the number of tenants and the number of floors in the property. It is important to know that although the above definitions are correct, each Council has the authority to change them. We have come across a council that requires HMO licenses for properties with as few as 3 tenants and only 2 floors.
Please note: HMO’s are not to be confused with bedsits. Bedsit properties rented rooms in houses which share a bathroom with other tenants but has its own kitchen facilities.
HMO Mortgages for Properties that Require an HMO Licence
You can now gain access to the best solutions in the market. We are experts in arranging mortgages for HMO properties that require a licence and have a choice of 7 HMO mortgage lenders that are very active in providing HMO mortgages.
This choice of 7 HMO mortgage lenders allows us to arrange HMO mortgages from 3 rooms up to an unlimited number of rooms. And at least 4 of these lenders are on restricted panels which means only selected brokers have access to them.
With access to both the buy to let HMO mortgage lenders as well as the HMO commercial mortgage lenders, we can provide you with the widest range of products currently available in the market. We can assist if you are a first time HMO landlord or a professional landlord with many HMO’s.
Operating an HMO brings benefits in terms of higher rental yields and income. But at the same time there is a responsibility under law to ensure the property meets requirements for:
- Fire safety – Smoke alarms, fire doors and fire escapes.
- Amenities – The kitchen and bathroom facilities must be sufficent for the number of tenants.
- Management – The HMO must be properly managed.