Sarah Johnson

You typically need a business plan, proof of income, property details, and projected rental income.

Typical fees include arrangement, valuation, legal fees, and possible early repayment charges.

Most lenders require a valid HMO license to approve a remortgage. If your license has expired, you'll need to renew it before applying. Some lenders may accept proof that renewal is in progress.

Compare your current monthly payments with the new mortgage payments, including all fees. Consider arrangement fees, legal costs, and early repayment charges. The break-even point is typically 2-3 years.

Rates usually range from 0.5% to 1.5% per month, depending on risk and loan-to-value.

Add up the monthly interest payments, arrangement fees, valuation fees, legal costs, and exit fees. Multiply monthly rate by loan term and add all one-off fees.

Bridging finance terms typically range from 1 to 18 months, with most loans being 6-12 months. Longer terms may be available but usually at higher rates.

Yes, most HMO properties require a license from your local council, especially if there are 5 or more tenants.

Yes, most lenders accept gifted deposits for HMO mortgages, but you'll need a gift letter and proof of the donor's identity and source of funds.

You'll need proof of income, bank statements, property details, HMO license (if applicable), rental income projections, and potentially a business plan for larger HMOs.

You'll need company accounts, director details, a business plan, and property details.

Most lenders require the limited company to have been trading for at least 12-24 months, though some specialist lenders may accept newer companies with strong business plans.

Limited company rates are typically 0.5-1.5% higher than personal HMO mortgages due to increased lender risk and administrative complexity.

Most lenders require a minimum 30% deposit for commercial HMOs.

Criteria include significant landlord experience, strong financial position, property suitability, adequate rental income projections, and compliance with commercial property regulations.

Conversion costs typically range from £15,000 to £50,000 per unit, depending on the property condition, required works, and local building standards.

Benefits include more flexible terms, simplified administration, and potentially better rates.

Most lenders require a minimum 25-30% deposit for portfolio HMO mortgages, though some may accept 20% for experienced landlords with strong portfolios.

You'll need proof of income, bank statements, portfolio details, property valuations, rental income evidence, HMO licenses, and comprehensive business plan.

Funds are usually released in stages as renovation milestones are reached and approved by the lender's surveyor.

Your lender will arrange a surveyor to assess the property and renovation works. You may also want an independent survey for peace of mind.

You'll need proof of income, bank statements, property details, detailed renovation plans, cost estimates, builder quotes, and potentially planning permission.

Most lenders require a minimum 30% deposit for large HMOs, though some may accept 25% for experienced landlords.

Large HMOs require enhanced fire safety measures, emergency lighting, fire doors, sprinkler systems, and regular safety inspections. Requirements vary by council.

Large HMO mortgage applications typically take 6-12 weeks due to additional complexity, licensing requirements, and more thorough lender assessments.

Rates for expat HMO mortgages are typically 0.5-1% higher than for UK residents due to increased risk.

Most lenders require a UK bank account for expat HMO mortgages, though some may accept international accounts if you have a UK-based property manager.

Expat HMO mortgage applications typically take 8-12 weeks due to additional verification of overseas income and potentially more complex documentation requirements.

Most lenders require a minimum 30% deposit for borrowers with adverse credit, though some may accept 25%.

Strategies include paying all bills on time, reducing credit card balances, checking your credit report for errors, and avoiding new credit applications.

Criteria include strong current income, evidence of credit improvement, adequate deposit, property suitability, and often landlord experience.

Most lenders require a minimum 30% deposit for student HMOs, though some may accept 25% for experienced landlords.

Student rentals are typically 9-10 months per year with summer voids. Lenders assess rental income based on the academic year and may require higher rental coverage ratios.

Apply through your local council with property details, floor plans, safety certificates, and management arrangements. Processing typically takes 8-12 weeks.

Most lenders require a minimum 30% deposit, though some may accept 25% for experienced landlords.

Multi unit freehold properties have separate self-contained units on a single title, requiring different licensing, management approaches, and potentially higher maintenance costs.

Criteria include property suitability for multiple units, strong rental demand, adequate room sizes, safety compliance, and often landlord experience with multi-unit properties.

Rates are typically 0.5-1% higher than for experienced landlords, due to increased risk.

Property management fees typically range from 8% to 15% of rental income, depending on the level of service and number of properties managed.

First time landlord HMO mortgage applications typically take 6-10 weeks due to additional checks and potentially more thorough lender assessments.

It's recommended to include a contingency of 5-10% of your total build costs. This buffer helps cover unexpected expenses, price increases, or scope changes during the project. For complex HMO conversions or properties requiring significant structural work, consider using the higher end of this range. Lenders will expect to see this contingency in your cost breakdown.

Key factors include loan-to-value (LTV), property type, landlord experience, credit history, rental income, and whether the mortgage is for a limited company or individual.

For multi-unit HMO properties, input the total combined rental income from all units and the total property value. If units have different rent levels, add them together for the annual figure. For properties with mixed-use (some HMO rooms, some standard lets), calculate each portion separately then combine the results. Consider factors specific to multi-unit properties: higher management complexity, potentially lower void risks due to multiple income streams, and varying maintenance costs per unit. The calculator works best when you have confirmed rental figures for each unit type in your local market.

Yes, but adjust your inputs for post-renovation values and rental potential. Use the expected property value after improvements and the projected rental income once refurbished and fully let. Factor renovation costs into your total investment when calculating yield on capital invested. For major conversions (e.g., converting a house to HMO), research local planning requirements and factor in 3-6 months without rental income during works. Consider using our refurbishment calculator alongside the yield calculator for a complete financial picture. Remember that renovation projects carry additional risks that may affect your actual returns.

The HMO cashflow calculator can factor in vacancy periods by allowing you to adjust the occupancy rate below 100%. For student HMOs, consider 10-15% vacancy allowance for summer periods. Professional HMOs typically require 5-8% void allowance for tenant turnover. You can input either an annual average occupancy rate or specify monthly variations if you expect seasonal patterns. The calculator multiplies your potential rental income by the occupancy percentage to give realistic monthly cashflow projections. Always be conservative with occupancy assumptions, especially for new properties or untested markets.

The calculator can project cashflow over multiple years by allowing you to input assumptions for rental growth, expense inflation, and mortgage payment changes. Input annual rental increases (typically 3-5% for HMOs), factor in inflation for operating costs (2-4% annually), and account for mortgage rate changes if you're on variable or fixed-rate deals ending soon. Remember that long-term projections become less accurate over time due to market unpredictability, regulatory changes, and property aging. Use long-term projections for strategic planning but review and update assumptions annually based on actual performance and market conditions.

Input realistic annual rent increase assumptions based on local market data and tenant types. Professional HMOs typically allow 3-5% annual increases, while student properties may increase by 2-4% annually due to competition. Check your tenancy agreements for rent review clauses and local market conditions. Factor in inflation affecting your costs (2-4% annually) versus rental growth. In strong markets, HMO rents often outpace inflation, but be conservative in projections. Consider whether improvements or changing local demographics might justify above-market increases. Always comply with local rent increase regulations and notice requirements.

Limited companies pay different stamp duty rates on HMO purchases. For residential properties over £500,000, companies pay a flat 15% rate, but this can be reduced to standard rates plus 3% additional property surcharge if the company qualifies for relief (typically rental businesses). Properties under £500,000 follow standard additional property rates (3% surcharge). Companies cannot claim first-time buyer relief. However, companies can benefit from other tax advantages like corporation tax rates on rental profits and mortgage interest deductibility. Consider the total tax position, not just stamp duty, when deciding on ownership structure.

For portfolio purchases involving multiple HMO properties, stamp duty is calculated on the total transaction value if purchased simultaneously from the same seller. This means the combined purchase price determines which tax bands apply, potentially pushing you into higher rate categories. Each property in the portfolio typically qualifies for additional property rates (+3% surcharge) unless you're replacing your main residence. Consider structuring purchases separately if the combined value pushes you into significantly higher bands. For corporate purchases over £500,000 total, the 15% corporate rate may apply unless relief is claimed.

Revalue HMO properties annually for portfolio management, or when significant changes occur: major improvements or conversions, local market shifts, regulatory changes affecting the area, refinancing or remortgaging needs, or when considering sale. Property values can change due to factors like new university developments, transport improvements, changes in local licensing rules, or area regeneration. Annual revaluations help track performance, optimize rental pricing, and identify refinancing opportunities. For active portfolio management, use calculator estimates for regular monitoring but obtain professional valuations for formal lending or sale decisions.

Local licensing significantly impacts HMO valuations through compliance costs, operational restrictions, and market supply. Properties in mandatory licensing areas may have higher values due to barriers to entry, but also face ongoing compliance costs. Additional licensing schemes can reduce values by limiting conversion opportunities and increasing operational expenses. Article 4 directions restricting new HMO conversions typically increase existing HMO values by limiting supply. Factor in licensing fees (£500-1,500 annually), required safety improvements, and potential occupancy restrictions when calculating values. Properties with established licenses often command premiums over those requiring new applications.

Most HMO lenders require: minimum 2 years' landlord experience with at least 2 properties, demonstrated rental property management knowledge, understanding of HMO regulations and licensing requirements, and financial stability with sufficient rental income coverage. Some specialist lenders accept first-time HMO investors if they have: significant property investment experience, relevant qualifications (property management courses), strong financial position with substantial deposits (30%+), or professional property management arrangements. Portfolio landlords with 4+ properties often have more lenient experience requirements.

HMO mortgage lenders typically require credit scores of 650+ (Experian) or equivalent across other agencies, though requirements vary by lender. Factors affecting credit assessment include: payment history on existing mortgages and credit commitments, overall debt-to-income ratios, recent credit applications or changes, CCJs, defaults, or bankruptcy history, and current financial stability. Some specialist HMO lenders focus more on property experience and rental income potential than pure credit scores. Adverse credit specialists may accept lower scores (580+) but typically require larger deposits and charge higher rates.

Lenders assess HMO management arrangements as a key risk factor, considering: applicant's direct management experience and local presence, quality and track record of appointed management companies, management fee structures (typically 8-15% of rental income), proximity of owner/manager to the property, and systems for tenant vetting, maintenance, and compliance. Self-management is often preferred by lenders if applicants have experience and local presence. Professional management companies must demonstrate HMO expertise, proper licensing, and insurance coverage. Some lenders have approved management company panels or minimum service standards.

HMO mortgage ongoing obligations typically include: maintaining required insurance coverage throughout the term, keeping properties licensed and compliant with regulations, providing annual rental statements or portfolio updates, obtaining consent for major changes (structural alterations, management arrangements), maintaining minimum rental coverage ratios, and notifying lenders of any material changes (planning issues, licensing problems, significant void periods). Some lenders require annual portfolio reviews or property inspections. Breach of obligations can trigger early repayment clauses or penalty interest rates.

Professional HMO properties typically offer: higher quality furnishings and decor, longer tenancy agreements (12+ months vs 9-10 months for students), quieter environments with professional tenants, higher rent per room but potentially lower yields overall, different locations (city centers, business districts vs university areas), more stringent tenant vetting processes, and different insurance and management requirements. Professional tenants often expect: ensuite bathrooms, quality kitchen appliances, dedicated study/work spaces, better parking facilities, and responsive property management. They generate more stable income but may be more demanding regarding property standards and maintenance.

Evaluate HMO conversion opportunities by assessing: local planning policy and Article 4 direction status, potential room yield and optimal layout configuration, structural suitability and conversion costs (typically £8,000-15,000 per room), local rental demand and comparable rental rates, licensing requirements and associated costs, parking availability and neighbor considerations, and total project costs versus potential returns. Calculate yields based on post-conversion values and include all setup costs. Consider factors like ceiling heights, natural light, sound insulation requirements, and compliance with space standards. Professional feasibility studies can identify potential issues before purchase.