Traditional buy-to-let models would usually house a family, or people who have decided to live together. Disputes can usually be resolved within the household, without the landlord being involved. Therefore, landlords will usually have an HMO type such as student buy-to-let or one that is only for working professionals.
There are also void period to be aware of. Traditional buy to let has fewer void period, while HMOs have longer void periods. HMOs can also have higher maintenance fees than traditional buy to rent models. This is due to the shared communal areas, such as bathrooms and kitchens, or living rooms (where applicable).
A traditional buy-to-let property could accommodate one person, or a large family. The household would have to pay one rental payment on a weekly and monthly basis. The utility bills are also paid by the household. These can be called'singlelets'.
HMO licenses are issued by local councils and can be renewed for up to five years, if approved. HMO licenses are issued for each property, not each landlord. A landlord who has three HMO properties would need a license for each one.
HMO mortgages tend to be restricted to experienced landlords. For example, some lenders won't consider applications from someone who has been a landlord for more than 2 years and/or has experience in HMO-letting. Lenders might have additional requirements. It is possible to apply for an HMO mortgage but it may be difficult to obtain approval if you are not a landlord.
Complex property types will require more risk-averse lenders to be open to lending to them. Even those that are willing to lend to them, they will each have their own criteria.
HMOs are typically more expensive to run and usually require more effort and time. HMOs have different safety and security requirements than regular renters. For example, every room will require locks. HMO setup costs will therefore be more expensive than regular buys to let.