What is an HMO?

A House of Multiple Occupation (HMO) is a property such as shared student accommodation where the rooms are let to multiple occupants who are not related. It is a property where three or more people from two or more “households” share a cooking or washing area, or toilet. Shared houses, hostels and shared worker accommodation are also examples of HMOs.

We strongly advise you work with an HMO mortgage broker if you want to let an HMO as there are possible complications to be aware of and many relevant regulations, such as local authority limitations, licencing, room size, insurance and others.

The requirements for an HMO mortgage are more stringent and lenders will normally apply different criteria.

Examples of HMO criteria are:

• Applicants will require 12 months experience of being a landlord and owning other buy to let properties
• Typically, the maximum number of bedrooms is eight, but some lenders may consider higher occupancy
• Loan to value is normally restricted to 75%.

You should check with your local council whether a licence is required, in order to comply with quality and safety standards. Failing to obtain a licence where necessary can result in large fines of up to £20,000 in England and Wales and up to £50,000 in Scotland, as it is a criminal offence. Always check the rules in the local area.

HMO mortgage brokers

At Aspire Financial Services we understand how complex certain areas of the mortgage market can be. Contact us today and speak to one of our specialist HMO mortgage brokers.


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