HMO – House in Multiple Occupation
If two or more people occupy a property but don’t form a single household, the property is classed as a HMO. In England and Wales, landlords with HMO’s of three stories or above and with five or more tenants have to apply for a license.
These licenses seem just like another money making scheme but are supposed to impose tough management standards relating to fire and electrical safety and amenities. But one rule is that if there are five or more people there must be one separate toilet with a basin and at least one separate bathroom with a sink/basin in each bathroom.
Some councils have their own rules where the licensing can apply to HMOs with three or less tenants. The only way to make sure is by checking with the local authority. Licenses can vary from £200 to £1500.
Getting a mortgage on a HMO could get stricter. Lower LTV (loan to value ratio) are likely ad finance for HMOs could be restricted to professional experienced portfolio landlords.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
