For Remortgaging & Buying Investment Property In The UK
HMO Offer! Subsequent rate 5% + BBR 75% LTV Product fee: 1.5% of loan As at 16th June 2022 Landlord Mortgage Offer Subsequent rate 4.99% Purchase & remortgage 65% LTV Product Fee: 2% ERCs apply As at 16th June 2022 Short Term 60% LTV Buying & Renovating Conversions Auction Purchase As at 16th June 2022
5 Year Fixed
Buy To Let
5 Year Fixed
Buy & Refurb
1 to 12 Months
Subsequent rate 5% + BBR
Product fee: 1.5% of loan
As at 16th June 2022
Landlord Mortgage Offer
Subsequent rate 4.99%
Purchase & remortgage
Product Fee: 2%
As at 16th June 2022
Buying & Renovating
As at 16th June 2022
FOR MORE DETAILS ABOUT HMOs, SCROLL DOWN...
First-time investors and experienced single-tenant landlords may be attracted by the attractive returns offered by a property with multiple tenants (also known as multi-lets, or houses in multiple occupancy - HMOs).
HMOs range from a house-share arranged by a group of friends, to a house or flat provided for a group of students sharing, to high-spec accommodation for young professionals or low-cost housing for shift-workers or housing benefit recipients.
The projected annual returns of 4-5% for a straightforward buy-to-let (BTL) can be more doubled for a multiple-occupancy letting. But the finance issues are more complex, and require specialist advice. Investors looking for interest-only mortgage finance will need to access specialist financial products.
A house in multiple occupation (HMO) is any rental property with shared facilities (such as bathrooms and kitchens) which is rented out to three or more people who aren’t part of a single "household" (usually a family). They’re what’s often known as a "house share".
What many people refer to as an HMO is actually a Large HMO, which is a rental property with five or more tenants, where the tenants share toilet, bathroom or kitchen facilities.
There are nearly 40 lenders operating in the buy to let mortgage market, offering approximately 1,500 different mortgage products. Many of them can only be accessed by a broker engaged to act on your behalf.
Lenders will have different criteria for the number of rooms in an HMO they will consider, and how the calculate the value of the property (usually as a combination of Bricks & Mortar and Investment value).
Your personal investment strategy will determine whether you're looking for an interest-only or a repayment (capital and interest) HMO mortgage.
Repayment finance is often most suitable for investors who are using property as a store of wealth: as an alternative pension plan or to build a small property portfolio. With monthly capital and interest repayments, the investor can be sure they will be able to repay the loans at the end of the mortgage terms.
Professional landlords and property investors may be more likely to opt for interest-only finance - for two main reasons.
Firstly, your long-term strategy may be to continue building a sizeable portfolio of investment properties. By keeping your mortgage repayments to a minimum you will have the cashflow to re-gear your capital and make further purchases. At the end of the mortgage terms, you will be happy to sell properties to repay the initial advances.
Secondly, you may want to take advantage of the tax benefits: interest on buy to let mortgages can be off-set against tax. We recommend that you seek professional advice from a qualified accountant regarding the tax incentives available to you.
Most lenders favour HMO mortgages on a capital repayment with interest basis, so you'll be looking for a specialist product. There are lenders willing to offer interest-only mortgages up to 10 or 15 years: an experienced broker will be able to access them for you.
Lenders commonly apply a slightly higher "interest coverage ratio" (currently around 1.7%) to HMO mortgages, compared with standard BTL mortgages (usually 1.25%), to cover the perceived high risk of a multi-tenanted property.
An experienced broker will be able to identify the most appropriate – and cheapest – finance for you in this specialised area of the buy to let market, and will package your application to make sure it meets the lender's criteria.
Prospective landlords may see HMO properties advertised for sale offering "100%+ gross yields," but you’ll need to be aware that the costs of setting up and running HMO properties are considerable, so the key figure is net yield.
HMO landlord costs include:
Profits may be maximised by running the property through a limited company structure: you’ll need to take advice from an accountant / financial adviser.
One of our specialist HMO mortgage advisors will be happy to discuss your specific financing requirements with you:
I approached Clifton Private Finance to help me get a mortgage as an Expat working in the Far East. I would normally 'cut out the middle man' on something like this and try to get myself a deal directly with the banks, but I am now sold on the broker concept and wouldn't hesitate to use Clifton Private Finance again. There were a number of complicating factors such as being an expat, the stamp duty holiday, the sheer amount I wanted to borrow and the fact I wanted it all wrapped up before the Stamp Duty holiday ended. It is clear to me now that the relationship that brokers have managed to foster with their banks means they can simply pull levers and make stuff happen that us ordinary folk cannot. Put simply, they are worth every penny, will take most of the stress out of the lending process, and seem to have access to deals that you just won't find on the internet. Thank you George and Jan for all your hard work!
Luther was excellent. Very clear in his advice and explanations of products and was able to move things on very quickly when we ran into difficulties with the estate agents. Without a doubt I would recommend Luther to all friends, family and colleagues. Luther was a joy to deal with and took a lot of the stress out of a troublesome transaction, from my end. I would view Luther as real asset to Clifton Private Finance Ltd.
The team at Clifton Private Finance has been outstanding, not only in helping me to obtain a mortgage on a slightly unusual home, but also in continuing to provide support and liaise with the lender and solicitors through to completion. Thank you for making the process of buying my first home much easier.
Sam O'Neill, and the new lender he identified for me, worked tirelessly together using my time constraints, to make sure my mortgage application was completed on time. They are a brilliant company to work with, fast, efficient, open and transparent from the very beginning, and turned a seemingly impossible situation into a viable one. Sam was brilliant throughout the whole process and I would highly recommend him, and his colleague Helen, to anyone without hesitation, I cannot speak highly enough about them.
I was incredibly lucky to find Clifton Private Finance after a search on line as their service has been more than exemplary. My point of contact was Sam 0’Neill and he was happy to help at every stage during the application of the bridging loan, making a stressful process much easier to deal with. He was always available by phone or email and gave prompt answers to queries I had as well as always getting back to me when he said he would. That to me is excellent customer service and I cannot thank him personally or the company enough for the support they have given me.
Adam cannot thank you enough for all your support throughout this arrangement. You have gone more than the extra mile to support us. Without you we would not have got our dream retirement home. You have been most professional and personable. Liz and I would be more than happy if you wanted to use us a reference with respect to any future clients.
Nigel & Liz K - Bristol
You have certainly shown me that you do everything for your clients, including tolerating their excessive emails and questions for updates. I have been kept in the loop, from yourself, about why the delays were occurring (Nationwide, post etc) which I would like to highlight that I really appreciated. I certainly will be able to recommend you to others as and when the need arises.
I recently contacted Clifton Private Finance after a Google search for bridging finance providers and was immediately struck by their efficiency and support. Forms were emailed over almost immediately and the necessary finance was arranged within a few days. None of the other companies I contacted came close to their professionalism, and the quote that I eventually received was impressive. Thank you Adam, your help has enabled us to reserve the house that we wanted and I certainly recommend you to others.
Mr M. R. - Oxford
Absolutely brilliant. The service was first class, got everything sorted efficiently and were always friendly. Any fees were negligible compared to the service offered. Robert was particularly outstanding.
My advisor, Robert, was very helpful in finding the mortgage to suit me. He kept me up to date throughout the process and dealt with any issues when they arose.