hmo mortgages uk
HMOs can prove more challenging to manage than traditional buy and let models. HMOs are often shared by tenants, so it is possible for tenants to fall out. A mediator may be needed between tenants who aren't on the same page.
As nobody wants to take another person's mess, common areas tend to 'get left. Sometimes, landlords will need to clean the property or hire cleaners.
A single agreement can be used by landlords to manage HMO properties. Or, each tenant can have their own contract.
HMOs can prove more challenging to manage than traditional buy and let models. HMOs are often shared by tenants, so it is possible for tenants to fall out. A mediator may be needed between tenants who aren't on the same page.
A House in Multiple Occupation, also known as HMO, is a property rented to more than one tenant. In this case, the tenants share some of the rooms with each other, such as a bathroom or kitchen. The kitchen, bathroom, lounge and living room. People use the terms "flat share" or "house share" to refer to an HMO.
HMO mortgage lenders will have specific requirements regarding the property. Some lenders will require that the property has only one kitchen or have communal seating for tenants. Others may limit the number of bedrooms and floors. You will need to find a lender if you plan to renovate the property prior to letting it out. A mortgage broker will help you navigate these restrictions and conditions in order to find a lender who is willing.
HMO mortgages require large deposits. LTV ratios ranging from 60% to 75% (i.e. A minimum 25% deposit. Lenders will calculate potential rental income, but they will typically base their figures on the rental income you'd earn by renting the property out to one household. This means that the mortgage must be reasonable and affordable for you. A mortgage broker is able to tell you how large of an HMO mortgage your lender can afford.
You want to make a long-term investment that will yield a high return. To do this, you need to negotiate the best terms possible on your finance. For more information, contact our HMO Mortgage financing specialists.