A message from HMO Mortgage Brokers | Houses in Multiple Occupation (HMOs) remains in strong demand from tenants across the UK. They offer affordable rent, shared living spaces, and flexible accommodation. Whether aimed at students or young professionals, HMOs continue to attract interest due to their practicality and lower living costs.
The key to success in HMO investing lies in securing the right mortgage finance from the start. As HMO mortgage specialists, we offer clear, structured advice for this specific property investment area.
We can assist whether you’re a new landlord converting a single house or an investor with a licensed multi-let portfolio. Our team understands the detailed criteria lenders require and can guide you through every step of the mortgage process.
We can support you with:
Converting a standard home into a compliant HMO under UK regulations
Refinancing an existing HMO to release equity or improve rental return
Purchasing licensed HMOs or accommodation for student tenants
Expanding into semi-commercial or multi-unit HMO investments
Some lenders may consider HMOs complex, but we know how to present your application clearly and correctly. We work with lenders who understand HMOs and offer mortgage products designed for this investment type. Our goal is to match your circumstances with finance that suits your plans and meets UK lending criteria.
Let us help you arrange the right mortgage and take confident steps towards building a successful HMO portfolio.
What Is an HMO Mortgage and How Does It Work?
An HMO mortgage is a specialist loan used to finance properties rented out to three or more tenants from households sharing common facilities like kitchens and bathrooms. Lenders consider HMOs higher risk than standard buy-to-let mortgages due to more intensive management needs and the potential for void periods.
Key Features of HMO Mortgages:
Typically interest-only, with the capital repaid at the end of the term.
Requires larger deposits, often 25–40% of the property’s value.
Rental income assessments are more detailed, with lenders often requiring rental cover ratios of 145–170%.
Properties may need mandatory licensing, especially those with five or more tenants.
💡 Did You Know?
The average rental yield for HMOs is significantly higher than standard buy-to-lets—up to 8–10%, compared to 4–6% for single-let properties.
Types of HMO Mortgages
HMO financing isn’t one-size-fits-all. Here’s a breakdown of mortgage types tailored to different investor goals:
✔️ Small HMO Mortgages
For properties with 3–4 tenants, often under local licensing thresholds. These are easier to finance and manage.
✔️ Large HMO Mortgages
Apply to properties with 5+ tenants. These deals often require mandatory HMO licensing and stricter fire safety standards, which causes lenders to scrutinise them more thoroughly.
✔️ Portfolio HMO Mortgages
Designed for landlords with multiple HMOs, allowing them to group properties under one finance package. These streamline management and offer portfolio-level borrowing flexibility.
✔️ Limited Company HMO Mortgages
Popular among investors looking to mitigate tax liabilities, especially after Section 24 tax relief changes. Lenders will assess your SPV (Special Purpose Vehicle) structure and company accounts.
📊 Industry Insight:
As of 2024, over 500,000 HMO properties are registered in the UK, driven by student rentals and the growing demand for affordable co-living spaces.
Why Work with a Specialist HMO Mortgage Broker?
Investing in HMO properties can be incredibly rewarding—but also notoriously complex. That’s where specialist brokers make all the difference.
🔍 Direct Access to HMO Lenders
We work with over 200 lenders, including specialist providers inaccessible to the public. That means faster decisions, tailored terms, and access to higher loan-to-value (LTV) options.
✅ Thorough Pre-Underwriting
Our in-house due diligence team—many of whom have worked as underwriters—carefully reviews your application before submission to catch red flags. This significantly improves your chances of approval and avoids costly delays.
🗂️ End-to-End Case Management
From property valuations and licensing compliance to liaising with solicitors and chasing paperwork—we handle it all so you can focus on what matters most: growing your HMO portfolio.
💡 Did You Know?
Some lenders now offer mortgages for HMO conversions, releasing funds in stages to support your refurbishment project from start to finish.
What First-Time HMO Investors Need to Know
If you’re new to HMO investing, here’s what should be on your radar:
HMO Licensing: Confirm with your local council if your property needs a license. Each council sets its own rules.
Planning Permission: Converting a home into an HMO may require a Change of Use (C4 or Sui Generis) classification.
Valuation Method: HMOs can be valued differently—on rental yield rather than market value, affecting loan size and terms.
Tenancy Agreements: Most lenders prefer Assured Shorthold Tenancies (ASTs) or individual tenancy agreements for each tenant.
Experience Matters: Some lenders only work with landlords who have previous HMO experience. If you’re just starting out, a broker can help pair you with the right lender.
📊 Stat to Note:
According to the English Housing Survey, over 38% of renters aged 25–34 live in shared accommodation—fueling demand for well-managed HMOs across the UK.
Let’s Make Your HMO Investment a Success
At Connect Experts, we help first-time buyers and seasoned landlords alike tap into the lucrative HMO market with tailored mortgage solutions. Whether you’re converting a terraced house into a five-bed HMO or refinancing an existing property for better yields, our brokers ensure your deal is structured right the first time.
