HMO Mortgage & Multi-Unit Property Mortgage

HMO

Collabot Finance can help you find a suitable HMO mortgage lender. We have extensive experience structuring all types of deals, from houses converted to individual flats with shared facilities to purpose-built student accommodation.

A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’. You must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if it is rented to 5 or more people who form more than 1 household, some or all tenants share toilet, bathroom or kitchen facilities, at least 1 tenant pays rent (or their employer pays it for them).

If the BTL property you wish to acquire needs a licence, you will need to meet the conditions of the licence such as fire regulations, and you will need to find a lender that will lend on a HMO property. 

Multi Unit Property (Multi Unit Block (MUB) or Multi Unit Freehold Block (MUFB))

A Multi-Unit Freehold Block (MUFB) is simply a property split into flats, but instead of having individual leaseholds, it’s held under a single freehold title.  Often converted from once being a single residence, each flat self contained with its own kitchen and bathroom facilities, although there will be shared hallways and often and a garden. The key difference to an HMO Mortgage here, is that each unit is self-contained with its own private entrance and separate AST (Assured Shorthold Tenancy), as opposed to an HMO property with shared kitchen, bathroom and communal area.

Some investors create ‘individual’ properties by creating long leases on each flat. This has the benefit of individual records at Land Registry, so each individual flat can be mortgaged or sold.

Contact Collabot Finance to discuss your needs in more detail.