Buy to Let Mortgages HMO
HMO Buy To Let Mortgage Service
Special features of what we offer include:
- Whole of market service - we work with most UK lenders
- Great rates! - Access to leading market mortgage rates
- Exclusive deals - Access to exclusive loan deals not available on high street
- Fast turnaround - Speak to us today if you need to move quickly. We can access bridging loans and short term finance
- Raising finance? - Looking to raise additional finance on top of your existing buy to let mortgage? - we have access to a range of finance solutions
What is an HMO?
An HMO (house in multiple occupations) is a property rented out by at least three people who are not from one household, but who share kitchen, toilet and bathroom facilities with other tenants. This type of housing is typical for a student ‘house share.
If you are letting to five people who are not from one household, then the property is classified as a ‘large HMO’ and you will need to gain a licence. The types and availability of buy to let finance is likely to differ depending on whether or not your property needs a licence.
Buy to Let Mortgages for non Licensed HMOs
Gaining buy to let finance for HMOs that do not require a licence is a somewhat simpler process than unlicenced HMOs, with most mainstream lenders offering finance.
Although we still recommend that you contact a mortgage broker, who can help you find the best rates and best buy to let mortgage solutions for your personal circumstances.
Buy to Let Mortgages for Licensed HMOs
Typically finance does tend to be more expensive for houses of multiple occupations, as not all lenders choose to lend money within this area.
In addition to this, lenders generally like to see experience and a proven track record within this industry when considering your application for a buy to let mortgage.
However, despite there are still a good number of lenders who do not see this as a barrier to finance, which is why we recommend seeking advice from a specialist mortgage broker.
Tax Changes in 2017
From 2017, landlords will no longer be able to deduct all the expenditure derived from their buy to let properties when calculating their profits for the financial year.
These changes do not however affect limited companies. This has led to an increase in landlords looking to set up limited companies as a way to avoid the effect of the new rules.
It is important to note, that those who wish to set up a limited company will have to consider the associated costs before doing so.
Regulation Changes in 2017
New changes to how the buy to let mortgage market is regulated come into effect from 2017 onwards. These changes may make it more difficult for landlords to secure buy to let mortgages.
Under the new regulations, before a traditional lender can approve a mortgage, the landlord's entire portfolio will be reviewed.
The landlord will be required to provide full disclosure of their financial records from all of their buy to let properties. This could affect the landlord’s application, particularly if some of the rentals are more profitable than others.
Unlike under the previous regulations where a landlord's portfolio could be propped up by a couple of profitable properties, a lender may not provide a buy to let mortgage on the basis that one of the landlord's properties is not providing a positive return.
The new regulations will introduce a stricter stress test, which will require landlords to satisfy traditional lenders that they can afford the mortgage repayments in the event that interest rates hit 5.5%.
Lenders will also require landlords with HMO properties to have a rental coverage ratio of at least 170%, as opposed to the standard 145% for regular properties .
We work with the majority of UK lenders, and have access to exclusive buy to let mortgage deals for HMOs that are not available on the high street, which means we can make that process of finding a HMO buy to let mortgage that bit easier.
To find more information about buy to let mortgages for HMOs why not call us today on 0117 403 4222, or fill in our online contact form to request a call-back for a free initial consultation with one of our advisors.