Landlords remortgaging onto specific HMO mortgages

by Aaron Strutt

Mar 23 2019

Specialist buy-to-let lenders are reporting a rise in the number of landlords being asked to remortgage on to HMO (house in multiple occupation) products.
 
Many landlords took standard buy-to-let mortgages when they purchased their buy-to-let properties, but after a change in the official guidelines, they are now in breach of their local authorities rules and potentially their lender’s acceptance criteria.

A house in multiple occupation is defined as a property rented by at least three people who are not part of the same family but share the bathroom and kitchen. However, the rules stating the number of people allowed to share a property vary depending on the local authority.

Aaron Strutt, product director at Trinity Financial, says "Our brokers have access to a range of lenders offering competitively priced HMO mortgages. Some of them will accept up to eight bedrooms providing they have a main kitchen and a separate living area."

Analysis by insurer Direct Line for Business found the cost of a new licence ranges from just £55 to £1,150 among different local authorities. The research – based on freedom of information requests to English local authorities and Welsh governments – found the average landlord licence across the UK costs £591.

Call Trinity Financial to arrange an HMO mortgage