The location of traditional rental properties isn't a problem. Our nationwide network of letting agents has rented properties in every possible location. They have been rented in every location, from rural to urban.
HMOs can be a great option for tenants as they are often affordable, fully furnished and include bills. This is especially true if you are a student, contractor or an overseas employee who is on a work visa. HMOs appeal to people because they are easy and cost-effective.
A House in Multiple Occupation or HMO is a property which is rented to three or more tenants. The unrelated tenants can share facilities like a bathroom or kitchen. HMO lets landlords rent the property to multiple households rather than just one.
Only a few UK specialists are available to lend on large HMOs and understand the potential for high yields given the higher risk of multiple tenants. They have their own definitions and criteria for HMOs and the types of properties they will lend against. This is why a broker is needed to help you put together your application and match you with the right broker. CMB is an experienced broker that can package your application to match the lender's terms. This significantly speeds up the process.
HMO mortgages will be required for rents to more then three tenants. The reason is that your property wonÕt be eligible for a regular Buy to Let mortgage. They are only intended for single-household tenants. If you were to apply for a regular mortgage to an HMO property, it would be a violation of the mortgage terms. Lenders could take legal action.
How much does it cost to obtain a HMO license? Costs associated with getting an HMO license will vary by location. Some councils charge based upon the number of bedrooms within a property. Others will charge a fixed fee that can range from a few hundred pounds up to more than a thousand. Lenders will know how long it takes to issue a license and may accept proof of application during mortgage underwriting. This is despite the fact that it is important to be prepared for this stage.
What are the costs of obtaining an HMO licence? Costs to obtain an HMO licence vary depending on where you live. Some councils will charge according to the number bedrooms in a home, while others may charge a flat fee of between a few hundred and over a thousand pounds. Lenders are well aware of how long it takes for a license to be issued. They may accept proof that the application was made during mortgage underwriting. It is best to prepare in advance so that there are no delays at this stage.