More management but a higher return, this is where landlords potentially look to increase yields
More management but a higher return, this is where landlords potentially look to increase yields either by small improvements to the property or perhaps utilising Bridging Finance for a larger extension to accommodate more tenants.
With the changes in legislation over the years, I have moved with these to be able to ensure my clients are aware of what is required of them as a landlord of a HMO property from a planning and building regulation perspective to ensure where possible, your next HMO property works for you.
From a lenders perspective, typically this is defined as any property occupied by 3 or more people who make up 3 individual households. Ie, not related to each other. Further definition could go on to include ‘and shares an amenity, such as a Kitchen or bathroom.’
However lenders to vary in their terminology and can be led by how many tenancy agreements are in place. So do all tenants have individual tenancy agreements or are they all on the same one. Others may be led by local licensing arrangements
It does vary from Council to Council and I’ve known some Councils waive the need for a license if a property is let in the manner they need however typically, where there are 4 or more individual tenants, it is likely that yes a license and the appropriate planning will be necessary.
In short yes. A lot lenders do prefer a client to have perhaps 12 to 24 months provable experience as a landlord however should you rather proceed straight onto a HMO property, we can still proceed.
Cheesy, but with the right broker, absolutely. There are elements to factor in with HMO properties which are different to a standard Residential or BTL purchase however we would cover these off with you before we proceed.
Anything which can’t be covered by other planning terminologies. Typically used tom cover the larger HMO’s of 7 or more people. Not a phrase limited to just property however!
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More and more a hot topic and certainly lenders over the past few years have been more open to this than previous, dependant on the scenario.
I do cover this off in more detail in one of my blog posts, so to keep it brief for now, should you be looking for a valuation based more on the rental than the bricks and mortar we can look to gear this to the right lender, dependant on other factors such as property itself, article 4 areas to ensure where possible the right outcome is achieved.
Certainly with HMO’s with the planning and building regulations requirements there are more legal matters to consider which we would consider also before we proceed on the right property. In a lot of cases I can cover these off upfront to ensure the right outcome..
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