The navigation buttons on the left show you which products are available for business users and which are available for individuals.
The contact form to request free advice and a no obligation quote is at the bottom of this page.
All quotations for buy to let & HMO mortgages are provided to you free of charge and on a no-obligation basis - there is no pressure, make your decision in your own time.
On this page we will cover the similarities and difference of the 2 types of product, we’ll start with Buy to Let and then cover HMO afterwards
Buy-to-let (BTL) mortgages are for landlords who want to buy property to rent it out. There are different types of buy to let mortgage, including those for limited companies, HMO mortgages, student lets and holiday homes. Buy-to-let mortgages are a lot like ordinary mortgages, but with some key differences:-
The maximum you can borrow is linked to the amount of rental income you expect to receive, Lenders typically need the rental income to be 25–30% higher than your mortgage payment. For the mortgage product itself, buy-to-let mortgage lenders will usually require a deposit of at least 15%, although 20% is far more common.
An independent whole of market broker with access to high street banks, specialist Buy to Let lenders and exclusive products. With numerous changes in the BTL market over recent years; including tax rules changes, SDLT rules and mortgage affordability criteria, it’s more important than ever that you choose the right mortgage.
With a broker’s knowledge and expertise, you can be certain that whether you require a mortgage for a simple Buy To Let property or are looking to refinance a property portfolio, they will find the best deal for you – all brokers need to register with the FCA, and as part of that they need to treat customers fairly, meaning that they will offer you the most suitable product for your circumstances.
If you are interested in getting free advice on the best BTL mortgage for your circumstances, together with a no obligation quotation, please complete the contact form further down the page and one of our advisors will call you back to discuss your options.
A house in multiple occupation (HMO) is a property where both of the following apply:-
A large HMO is a property where both of the following apply:
A household is either a single person or members of the same family who live together. A family includes people who are:-
If a HMO landlord applies for or renews a HMO licence on or after 1 October 2018, bedroom sizes must be at least:-
Given the extra responsibilities above, why would someone want to own a HMO? A traditional buy to let property would typically accommodate one person or a family. In rental terms, one rent would be due from the household, on a weekly or monthly basis. The household would also pay the utility bills. These can often be referred to as ‘single-lets’.
Let’s look at why a HMO is considered more profitable than a traditional buy to let:
Traditional buy to let
4 bedroom semi-detached house with 2 reception rooms
Rented to a family, consisting of a husband, wife and 2 children
Monthly rental income = £700
Annual rental income = £8400
HMO buy to let
4 bedroom semi-detached house with 2 reception rooms
1 reception room converted to a bedroom
Rented to 5 single working professionals
Monthly rental income per tenant = £400
Monthly rental income = £2000
Annual rental income = £24,000
The majority of HMO mortgage lenders will require landlords to have experience in letting property. There are only a handful of lenders that may consider new landlords with no experience, however the rates offered may be higher than average. Some lenders may also have a preference on who manages the HMO, such as a letting agency as opposed to managing it on your own.
Despite their popularity, HMO mortgages are still considered a niche mortgage type. The mortgage application is very comprehensive when compared to a standard buy to let mortgage. For this reason, HMO mortgages tend to be offered through qualified mortgage brokers and not direct to landlords.
Lenders may request information on some or all of:-
HMO mortgage rates tend to be higher than standard buy to let mortgage products. This is because the HMO mortgage market is less competitive. Lenders that are prepared to lend will charge slightly higher fees and rates for the privilege. That being said, the income from an HMO should be more than enough to cover a mortgage, utility bills and maintenance. In addition, an HMO mortgage will usually take the rental income into consideration, drastically improving the maximum mortgage amount available.
HMO mortgages can be offered on variable and tracker rates. LTV rates usually start at 80% LTV, with more attractive rates being offered with higher deposits and lower LTV ratios.
Many properties used as HMOs are houses or large buildings which have been converted specifically for this purpose. Many people require help and advice when looking to approach lenders to fund this kind of project. A broker will have a trusted panel of lenders that can accommodate almost any circumstances and are able to lend on almost any property type, including:-
A simple HMO should take around the same as a buy-to-let mortgage but a more complex HMO could take longer.
Many HMO lenders cap their max lending somewhere between £500,000 and £1m. There is no set rule for loans classed as a larger HMO mortgage but realistically £1m and above is the larger end of the scale.
Also, properties with eight or more letting rooms may be considered large meaning a specialist lender will be needed.
Here is a range of criteria based on the requirements of numerous HMO mortgage providers:
We aim to offer an agreement in principle within four hours.
We currently serve the following UK post code areas (for example AB - Aberdeen means all areas in and around Aberdeen whose postcode starts with AB) :-
AB - Aberdeen, AL - St Albans, BA - Bath, BB - Blackburn, B - Birmingham, BD - Bradford, BH - Bournemouth, BL - Bolton, BN - Brighton, BR - Bromley, BS - Bristol, BT - Belfast, CA - Carlisle, CB - Cambridge, CF - Cardiff, CH - Chester, CM - Chelmsford, CO - Colchester, CR - Croydon, CT - Canterbury, CV - Coventry, CW - Crewe, DA - Dartford, DD - Dundee, DE - Derby, DG - Dumfries, DH - Durham, DL - Darlington, DN - Doncaster, DT - Dorchester, DY - Dudley, EC - London, EH - Edinburgh, E - London, EN - Enfield, EX - Exeter, FK - Falkirk, FY - Blackpool, G - Glasgow, GL - Gloucester, GU - Guildford, GY - Guernsey, HA - Harrow, HD - Huddersfield, HG - Harrogate, HP - Hemel Hempstead, HR - Hereford, HS - Western Isles, HU - Hull, HX - Halifax, IG - Ilford, M - Isle of Man, IP - Ipswich, IV - Inverness, JE - Jersey, KA - Kilmarnock, KT - Kingston Upon Thames, KW - Kirkwall, KY - Kirkcaldy, LA - Lancaster, LD - Llandrindod Wells, LE - Leicester, L - Liverpool, LL - Llandudno, LN - Lincoln, LS - Leeds, LU - Luton, ME - Medway, MK - Milton Keynes, ML - Motherwell, M - Manchester, NE - Newcastle, NG - Nottingham, N - London, NN - Northampton, NP - Newport, NR - Norwich, NW - London, OL - Oldham, OX - Oxford, PA - Paisley, PE - Peterborough, PH - Perth, PL - Plymouth, PO - Portsmouth, PR - Preston, RG - Reading, RH - Redhill, RM - Romford, SA - Swansea, SE - London, SG - Stevenage, SK - Stockport, SL - Slough, SM - Sutton, SN - Swindon, SO - Southampton, SP - Salisbury, SR - Sunderland, S - Sheffield, SS - Southend - On - Sea, ST - Stoke - On - Trent, SW - London, SY - Shrewsbury, TA - Taunton, TD - Galashiels, TF - Telford, TN - Tonbridge, TQ - Torquay, TR - Truro, TS - Cleveland, TW - Twickenham, UB - Uxbridge, WA - Warrington, WC - London, WD - Watford, WF - Wakefield, W - London, WN - Wigan, WR - Worcester, WS - Walsall, WV - Wolverhampton, YO - York, ZE - Lerwick.
If you are looking for a Buy to Let or HMO mortgage, please complete the contact form below and an advisor from our broker will talk through your options, answer any questions, give you any other relevant advice and provide you with a no obligation quotation.
We offer rapid decisions in principle – often within four hours – and our BTL/HMO mortgage advisors are available to answer any questions that may arise.
Please use the form below to get free advice and a quote on the best product for your circumstances.