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HMO

HMO (House of Multiple Occupation)

This is another niche buy-to-Let market that Advance Mortgages & Protection can help you with.

HMO is defined as ‘A shared house occupied by between three or more unrelated individuals, used as their only or main residence, forming more than one household, and who share basic amenities such as a kitchen or bathroom.’

This requires a Mandatory HMO licensing (a scheme covering the whole of England Wales) and depending which local authority, there may be a need for Additional Licensing (scheme covering some parts of England and Wales).
Every lender has their own criteria around HMO so finding the right one for you is what we at Advance Mortgages & Protection specialise in. Give a call to discuss.

An HMO is deemed to need a Mandatory license if:

  • It is occupied by 3 or more persons; or
  • It is occupied by persons living in two or more separate households; and
  • It meets:
    • The standard test; or
    • The self-contained test but is not a purpose-built flat situated in a block comprising 3 or more self-contained flats; or
    • The converted buildings test.

An HMO is deemed to need an Additional license if

  • It is situated in an area the local authority has designated subject to additional licensing.

Your property may be repossessed if you do not keep up with repayments on your mortgage or on any other secured loans.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage. 

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% of the amount borrowed, but a typical fee is £495.

Some buy to let mortgages and commercial mortgages are not regulated by the Financial Conduct Authority.