HMO mortgages

HMO stands for 'House in Multiple Occupation'. It's a property that's let to more than one household. They're an important part of the UK housing market, helping students, young professionals and people looking for more affordable housing.

 

For a property to be classed as an HMO, it needs to have at least three tenants who live separately, but share a kitchen or bathroom.

What's the difference between buy to lets and HMOs?

A buy to let property is rented to a single household. An HMO is rented to multiple households.

 

Because HMOs have shared living spaces, they need to meet different regulations. This is to make sure tenants are safe and can live together comfortably.

Do HMOs need a licence?

You must have a licence if you’re renting out a large HMO in England or Wales. This is to make sure they meet legal standards.

The UK government class a property as a large HMO if all of these apply:

it is rented to 5 or more people who form more than 1 household
some or all tenants share toilet, bathroom or kitchen facilities
at least 1 tenant pays rent (or their employer pays it for them).
Some councils might require a licence for smaller HMOs.

Am I eligible for an HMO mortgage with YBS?

We offer mortgages to professional HMO landlords, for large or small HMOs.

A professional HMO landlord is someone who:

has 12 months experience of managing HMOs
has a good understanding of their target market
can evidence the income their HMO generates
complies with relevant licencing and planning requirements.

The property must:

have up to 20 bedrooms
have up to 75% loan to value (LTV) for HMOs with up to 6 bedrooms
have up to 70% LTV for HMOs with between 7 and 20 bedrooms
be worth at least £350,000
be well-maintained.

Our range of products

Any property used as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage

How do I apply?

To switch your commercial mortgage to us, you can either apply online or by phone.

Online

Fill out this short form to give us the details to process your application.

By phone

Talk to one of our commercial mortgage specialists.
9am to 5pm Monday to Friday
Excluding bank holidays
Calls to 03 numbers are charged at the same rate as 01 or 02 from all phones.

What happens next?

1

Decision in Principle

The first thing we'll do is issue you with a DIP letter; you need to review this and add any details.
2

Valuation

A valuation will need to be carried out. Your lending manager will let you know the costs and make sure we have all the correct information so this part runs smoothly.
3

Meeting

Your relationship director will ask you some questions about your application and give you an idea of timescales.
4

Underwriter

Your relationship director will make a submission to our Customer Due Diligence and Credit teams for approval.
5

Mortgage offer

Once your application is approved, you'll be asked to pay a commitment fee to allow us to issue your Mortgage Offer letter, and progress your application to the legal process.

Things to consider

Loans subject to status

All loans are subject to status and secured against the property. Sometimes we’ll need to secure the loan against more assets.
Early Repayment Charges (ERCs) and an arrangement fee will apply. Other fees may also apply.
Exclusions and conditions apply.
For more information about our terms and conditions, call us on 0333 414 1171.

Early Repayment Charges

You can pay off your mortgage whenever you want. If you repay all or part of your mortgage ahead of your repayment plan, you will have to pay Early Repayment Charges (ERCs). An Early Repayment Charge (ERC) is a fee for ending a mortgage deal before the term ends.

If you have any questions on Early Repayment Charges, please call us on 01733 372 425.

For a full list of our mortgage charges and when these may apply, download our Guide to Buy to Let Fees and Charges or our Guide to Fees and Charges.