What Is an HMO?
A House of Multiple Occupation (HMO) is a property rented by multiple tenants who are not from the same household and who share facilities such as kitchens or bathrooms. Redwood Bank defines HMOs as follows:
HMOs meet high demand from students, young professionals, contractors and key workers, making them a valuable component of the UK rental market. Our mortgages are built to reflect the regulatory, licensing and operational requirements involved in operating these properties.
Why choose Redwood Bank for your HMO mortgage?
We know the realities of HMO investment and provide lending that works for experienced landlords who need flexibility, certainty and a lender who understands their business model.
What you can expect
Competitive pricing for small and large HMOs
Competitive affordability assessments
Rental coverage:
125% of monthly repayments for small HMOs
145% of monthly repayments for large HMOs
Support for complex structures and multi-entity ownership
No limit on the number of properties in a single application
Dual representation available to speed up completion
A fast, clear Decision in Principle
A dedicated relationship manager from enquiry to completion
Who we lend to
Landlord profile
Our HMO mortgages are designed for UK-based entities or individuals, partnerships, limited companies, LLPs, Trusts and SPVs, as well as UK expats. Landlords should be able to demonstrate:
At least 12 months’ experience managing HMOs or rental properties
Evidence of sustainable rental income
Compliance with planning and licensing requirements
Maximum borrower age 85 at end of loan term (although can be extended if a succession plan is in place)
Property criteria
We consider a wide range of HMO property types, including:
Small and large HMOs
Properties with complex layouts
Redeveloped or newly converted HMOs
Properties held in individual or company structures, including SPVs
Mixeduse assets where appropriate
Well-maintained properties in strong rental markets
Where appropriate, investment valuations may be used, including for suitable large HMOs, small HMOs that have undergone adaptations to meet HMO legislation and small HMOs located within an Article 4 area with C4 planning permission.
HMO mortgage product overview
Loan size
Mortgages from £250,000 to £6 million
Maximum loan per single asset:
Up to £3m at ≤65% LTV
Up to £2m for LTVs above 65%
Loan to Value (LTV)
Rates and terms
Rates from 5.59%
Fixed terms from 2, 3 and 5 years
Capital and interest or interest only
Interest only available up to 30 years for residential and semicommercial properties; up to 5 years for commercial (as part of a capital and interest repayment plan)
Higher fee/lower rate structures available to support affordability
Green Reward Cashback
Find out more about Green Cashback reward.
Additional lending flexibility
We can also consider:
UK expats up to 60%
SIPP and Trust borrowers
Corporate lets and nonAST arrangements
Serviced accommodation
Grade II listed buildings
New-build properties
Borrowers aged over 85 (subject to joint borrower structures)
10% overpayment allowance
No facility fee
Personal Guarantees capped at 25% (except where corporate guarantees are more appropriate)
Fast Decision in Principle and smooth completion
Our improved Decision in Principle process provides clarity early in the journey and helps you move forward quickly. Dual rep solicitors are available to streamline the legal process and reduce completion timelines.
