HMO stands quite simply for House in Multiple Occupation and is defined by the UK Government as:

A property is an HMO if it is let as a main or only home to at least three tenants, who form more than one household and who share a kitchen, bathroom or toilet.

HMO Mortgages

HMO Mortgages


Licensing – Impact on HMO Buy to Let Mortgages

The Housing act of 2004 brought in licensing for HMO’s. Primarily the definition for licensing was set at the same level but councils were given the flexibility to vary the exact wording which allowed for the capture of additional properties and as a result it would be wise to check with local wording before deciding how to proceed with a new investment property.

An HMO must have a licence if they are:

  • of three or more storeys
  • occupied by five or more persons who form more than one household

Source: Direct.Gov.Uk

In the lending environment which followed the credit crunch buy to let lenders shied away from high risk or unusual propositions. HMO Mortgages were therefore seen as non-standard or simply more complex than a typical residential buy to let mortgage. As a result the number of lenders able and willing to consider an HMO Buy to Let Mortgage is limited. That doesn’t mean they aren’t a great proposition. As we recently reported HMO yields are very high compared to regular buy to let mortgages.

HMO Landlord Responsibilities

The requirements for HMO Landlords are basically the same as any landlord would be tasked with but as HMO Tenants are often from more vulnerable groups of society there are a number of elements set out more clearly than would normally be the case. For example HMO landlords are required to submit to local authority Housing Health and Safety Rating System assessments and carry out any work that is subsequently recommended.

Landlords are also assessed as to their Fit and Proper status to hold an HMO license. This is quite different from regular landlords who are largely unregulated in this regard. Many changes to circumstances at the property will require the immediate notification of the council. Suitable forms are made available by all councils to facilitate these amendments and usually result in an application fee.

What Types of Property Can be an HMO?

Most properties can be classified as an HMO by the council. Anything from bedsits, shared houses, houses with lodgers, hostels and accommodation for homeless people to purpose built units can be classified.

Need advice on your HMO Mortgage?  Request a callback from an expert HMO Mortgage Broker now.