HMO Mortgages

HMO Mortgages

HMO means ‘house in multiple occupation’ and an HMO mortgage is a commercial loan specific to this type of investment.

An HMO property is, generally speaking, a single dwelling occupied by more than three tenants, who do not form a household, and who share kitchen, bathroom and toilet facilities. For a more in depth assessment of HMO properties and some examples of HMO business opportunities, see further down.

Acquiring a mortgage for a house in multiple occupation (HMO) is a specialist service for property investors focusing on multiple occupancy rented housing.

HMO from Charleston Financial Services

The benefits for landlords buying HMO properties are that they have great potential to generate very strong rental yields. However, mortgages for houses in multiple occupation have become increasingly difficult to source in the last few years.

Charleston Financial has years of experience arranging HMO mortgages, for purchase or remortgage, on the following basis subject to status.

• 70% loan to value (LTV)
• Rates from 3.81% above the base interest rate
• No early repayment charge (ERC) payable

HMO mortgage opportunities

• Student accommodation
• Young professional house-share
• DSS house-share

Landlords of HMO properties may need to acquire a licence from their local authority if they have more than three tenants, who do not form a household, and who share kitchen, bathroom and toilet facilities.

Defining HMO

1. A HMO consists of one or more units of living accommodation, which are not self contained flat or flats.

2. HMO living accommodation is occupied by people who do not form a single household. This generally means the occupants are not all members of the same family.

3. HMO living accommodation is occupied by these people as their only or main residence, or is treated as such.

4. HMO rents are payable (or other consideration is provided) in respect of at least one of those persons’ occupation of the living accommodation; and that two or more of the households share one or more basic amenities; or the living accommodation is lacking in one or more basic amenities (WC, wash hand basin, bath or shower, sink, hot and cold water, cooking facilities).

Self-contained flats may constitute HMOs if they fulfil all except the first listed of the above criteria. For a no-obligation quote please clicks below