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  • Independent & personal service
  • 98% SUCCESS rate
  • Access to 1,000+ MORTGAGES
  • 5 star reviews

House Of Multiple Occupancy Mortgages

Handpicking the best mortgage deals for busy house shares.

Houses of Multiple Occupancy (HMOs) are an area of the rental market that has seen growth in recent years. Houses in multiple occupations (HMOs) have become increasingly popular for both landlords and tenants over the past decade.

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HMOs can be a good option for landlords offering the potential for higher yields and higher monthly profits through letting properties by the room.

Unlike a traditional single assured shorthold tenancy, the landlord will pay for all utilities such as water, gas and electricity in an HMO. This means the tenant has a fixed monthly cost to live at the property

Historically they tended to be for students and many were of a poor standard. We’ve now seen a huge swing to high-quality lettings, some with ensuites in every room, sky tv, even a cinema room! Affluent professionals who want the flexibility to relocate if needed and the simplicity of one monthly payment to cover all bills, including rent, heating lighting, broadband are now the main growth area.

Landlords have seen then increased rent that can be achieved from moving from a 3-bed house as a single let, to refurbishing to a 5 bed HMO. We can arrange funding to convert, as well as buy existing, HMOs, and have done many times for our landlord clients.

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HMOs can offer greater rewards, but do need some additional considerations above a traditional single let:

If a property houses five or more people forming two or more households, a licence is needed. Licences are usually valid for five years but, bear in mind that there can sometimes be a wait for the licence to be granted – some councils could take many months to process applications.

Extra work may be required so that the property is compliant. In particular, the regulation stipulates that the minimum usable floor space is no less than 6.51 square metres for single occupancy and 10.22 square metres for double occupancy.

This could involve the landlord having to move or construct walls in order to alter room size, which in some cases will involve planning permission.

Note: It’s always worth checking the Local Authority standards for room size regulations as they can change between areas.

Landlords are subject to more regulation than if the property was let as a single unit. Extra requirements include fire alarms, fire doors and emergency lighting, and the council may add other conditions to your licence, for example improving the standard of your facilities such as additional bathrooms and cooking facilities.

Landlords are also required to test the fire alarms regularly, ensure communal areas are kept clean and rubbish is kept under control.

It’s worth remembering the high levels of tenant turnover involved. An HMO property with seven rooms actually involves taking on seven separate tenants, each requiring their own contract.

The level of effort required for an HMO property is invariably more than a single-let dwelling. But, the risk to the bottom line is lessened by the fact that revenue is spread over multiple occupants. And, with a high turnover of tenants, maintenance costs will go up and need to be minimised where possible.

High durability carpets, lifetime warranties on door handles, the right bathroom finishes, kitchen specification and even the choice of light bulbs are all things to consider.

We now have landlord clients who have found once they have successfully set up an HMO, look to repeat again and again, and grow their portfolio to many rooms.

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When you put down roots,
so do we.

Working with our long-standing charity partner, Gloucestershire Wildlife Trust, we pledge to plant a tree in your name when your mortgage completes.

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To discover your options, call us today on 01242 696 235 or email hello@themortgagebranch.com