hmo finance officer
What returns can I expect from an HMO
Multilets work much the same as HMOs. They can be rented out by unrelated tenants, who share communal facilities within properties. However, the main difference between them and HMOs is they do not require a license.
Complex property types are more risky than others. Lenders that don't want to lend to them will not be willing to do so. Those who do will have to meet their individual criteria.
What returns can I expect from an HMO
HMOs may be more difficult than traditional buy-to let models. HMOs have facilities that are shared between tenants. Tenants may sometimes become disenfranchised. Sometimes, tenants may not see eye to eye and you could be called upon as a mediator.
Many HMOs can be furnished fully. This adds an additional cost. Traditional buy-to-let properties are often rented unfurnished.
HMO mortgages are currently offered by 27 lenders to individual applicants and 23 to limited businesses. HMO mortgage rates tend not to be lower than the vanilla buy to rent counterparts, as they are a special property type. Lenders have benefited from increased competition in this market, which has resulted in rates starting at 1.64% to individuals and 2.69 for limited companies.
Lenders might accept evidence that you have applied for an HMO license in place of the actual licence. This is because it can take longer and may not always be practical. You may be considered 'fit and proper to operate an HMO if you have the licence. However, it is a good idea to have the license readily available in order to facilitate the application stage underwriting.