HMO Lending

HMO (House in Multiple Occupation) Lending

As a well-established HMO mortgage broker, we can confidently find the right HMO mortgage lender for you so you can start making profits on your buy-to-let properties. 

As you may know, HMO properties can yield fruitful results for a buy-to-let landlord, but it's not always straightforward to obtain an HMO mortgage.

At The Lending Channel, we are dedicated to finding the right HMO buy-to-let mortgage for you, allowing you to enjoy the benefits of rental income with minimal stress and effort 

Contact our team today to take a step towards purchasing your next HMO mortgage and property.

HMO buy-to-let mortgage: how to get one

What is an HMO property? 

HMO stands for Houses in Multiple Occupation. Plainly speaking, these are rental properties that are legally allowed to house multiple, unrelated tenants of three persons or more. 

These 'house shares' are often favoured by students and young professionals, as renting per room is generally cheaper than studio spaces or one-bedroom flats. Properties with a HMO licence allow groups of friends to live together under one roof for a reasonable price.

These types of properties are in high demand, especially in student cities such as Glasgow, Edinburgh, Stirling and Dundee, and can net landlords a lot of profit if they are managed and marketed properly.

How are HMOs different from other rental properties? 

The biggest draw of an HMO mortgage and property from a landlord perspective is that these properties are more profitable than your standard buy-to-let.

Although costs are lower for the individual tenants, charging per room enables the landlord to charge more overall. This is more lucrative than letting the entire property out to a singular family, for example. 

Of course, with greater reward comes greater risk. HMO properties are typically more challenging to manage, have a higher tenant turnover that's why HMO landlords require a more active presence.

in addition, an HMO finance can also be harder to obtain, which is why enlisting the help of an experience HMO mortgage broker is key.

How to obtain HMO buy-to-let mortgages 

If you're investing in your first HMO buy-to-let property, or you're adding to your portfolio, you will need a particular mortgage loan designed explicitly for HMO property.

Key differences between HMO mortgages and a typical buy-to-let mortgage include:

  • Expense 
  • Experience 
  • Licensing 
  • Property requirements 

HMO mortgages are often more expensive in terms of both fees and interest, which might chip away at your profit margins. This is why it is a good idea to weigh up your costs and consider whether the added expense and effort of an HMO lending will be worth your while. 

To be attractive to prospective lenders, there may be requirements about your property that you will have to meet. These could pertain to communal spaces and their nature (i.e. if they are substantial enough for tenants to sit in), maximum bedrooms, storeys, or any number of other factors.

If you're planning to renovate the property before seeking multiple tenants, you will have to get permission from the lender in advance.

help with getting an HMO mortgage

Who can get an HMO mortgage?

As noted above, one of the most significant differences between an HMO mortgage and a standard buy-to-let mortgage is that HMO mortgages are generally only available to experienced landlords. In fact, some lenders will refuse to accept applications from landlords with less than two years of letting experience. 

If this is your first buy-to-let property , you'll likely struggle to be approved for an HMO mortgage. In that case, it's wise to seek for other property finance solutions and start with less complex investment and to build experience by first letting property to a single household. 

If, after some time, you wish to convert an existing property into an HMO property, you can do that; get in touch, and we can discuss the option of remortgaging your property into an HMO. 

Another requirement for this type of specialist mortgage is an HMO license that landlords are required to have. Granted by the local council and are valid for five years, a landlord whose property is occupied by five people or more (from two or more separate households) will require an HMO license. However, this can vary, so it's best to check the policy with your council. 

It is also important to note that you will need a substantially larger deposit for HMO mortgages .

We can work with you to perform a 'HMO mortgage stress test' when considering your application and make sure we help you find a mortgage that's right for you so you can get accepted quicker without hurting your credit rating.

Mortgage broker in UK

Our HMO mortgage broker service is here to help 

The Lending Channel has many years of HMO mortgage broker experience in Scotland.

With our detailed knowledge, we can help you determine precisely what type of HMO mortgage prospective lenders will deem you able to afford and target those you are most likely to be accepted by. 

The Lending Channel are here to listen to your requirements and concerns and negotiate an appropriate HMO mortgage rates for you with a trustworthy lender. Mortgage applications can be complex and confusing, and HMO mortgages are certainly no exception.

Enlist the help a specialist HMO mortgage broker in Scotland and navigate the HMO mortgage market with ease by giving our team a call today on 01738 583008. 

You can also make an online enquiry through our site . We look forward to hearing from you soon. 

We are a credit broker, not a lender and are paid a commission by our lenders, full details of this along with our fees will be detailed in the Terms of Business we issue to you.

The Lending Channel ltd is a member of the National Association of Commercial Finance Brokers (NACFB).

2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel ltd are authorised and regulated by the Financial Conduct Authority.
FCA number 626787
Company number SC334818
Data Protection Act: Z2030159


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