Houses in Multiple Occupation

HMO Finance

HMOs offer some of the strongest yields in UK property — but they need specialist funding. Whether you're buying an existing HMO, converting a property, or refurbishing to increase room count, we arrange bridging finance from lenders who understand the HMO market.

Rated 4.8/5 by property professionals · From 0.37% pm · 250+ lender panel · No upfront fees

£250k – £10m+

Loan Size

1 – 18 months

Typical Term

Up to 75% LTV

Typical LTV

Key Features

What We Offer

All HMO types funded

From small shared houses to large-scale purpose-built HMOs. Licensed and unlicensed properties considered.

Purchase and conversion funding

Buy an existing HMO or convert a standard residential or commercial property into one.

Bridging to HMO mortgage

Short-term bridge while you convert and license the property, then refinance onto a specialist HMO mortgage.

Refurbishment costs included

Facilities can include build costs for fire safety, en-suite bathrooms, and room conversions.

Experienced HMO lender panel

We work with lenders who understand HMO valuations, licensing requirements, and rental yields.

Article 4 areas considered

Properties in Article 4 direction areas where planning permission is needed for HMO use.

Ideal For

Common Scenarios

Purchase an Existing HMO

Acquiring a property already operating as an HMO. Fast bridging to secure the deal before refinancing onto a BTL product.

Convert to HMO

Buying a standard house or commercial property and converting it into a multi-let HMO. Bridging covers purchase and works.

HMO Refurbishment

Upgrading an existing HMO — adding en-suites, fire safety, or increasing room count to boost yield.

Large-Scale HMO Development

Purpose-built HMO schemes or converting larger buildings into multi-room lets. We structure funding for scale.

Typical Costs

What You'll Pay

Every deal is different, but here's what to budget for on a typical HMO facility. Use our calculator to estimate total costs for your specific deal.

Interest Rate

0.55–0.95% per month, rolled up — no monthly payments.

Arrangement Fee

1–2% of the gross loan. Can be added to the facility or paid on completion.

Valuation Fee

£750–£3,000+ using HMO-specific valuation methodology.

Legal Fees

Your solicitor + lender's solicitor. Budget £2,000–£5,000+ for both sides.

Monitoring Surveyor

£300–£500 per inspection for staged drawdowns on conversion works.

HMO Licensing

£500–£1,500 local authority fee (separate from the loan — paid directly to the council).

Broker Fee

Our fee is typically 1% of the net loan, payable on completion. No upfront fees.

How It Works

From Purchase to Letting

Share the Deal

Tell us about the property — whether it's an existing HMO you're acquiring, or a house you're converting. We need the purchase price, planned room count, estimated works costs, and your target rental income. If it's in an Article 4 area, let us know — it affects which lenders are suitable.

Purchase and Convert

We arrange a bridging facility covering the purchase and any conversion works. If works are needed, build costs are typically released in stages. During this period you'll arrange HMO licensing with the local authority and complete fire safety compliance.

Let and Refinance

Once the HMO is licensed, tenanted, and producing income, you refinance onto a specialist HMO mortgage — typically at the uplifted value based on the rental income. This often allows you to extract your original capital and retain the asset.

Who Is This For

Typical HMO Borrowers

First-Time HMO Investors

Stepping up from standard BTL to higher-yielding HMOs. Bridging funds the purchase and conversion while you obtain the licence and tenant the property.

Portfolio HMO Operators

Experienced landlords adding to an existing HMO portfolio. Speed of acquisition matters when good stock is scarce — bridging lets you move fast.

Commercial-to-HMO Converters

Converting offices, retail units, or other commercial property into multi-let residential. Bridging covers purchase and works before you refinance onto an HMO mortgage.

Auction Buyers

HMOs frequently come to auction. Bridging provides the certainty and speed to complete within the 28-day deadline, then convert and refinance.

Common Questions

HMO Finance FAQ

Do I need an HMO licence before I can get bridging finance?

No — bridging finance is typically arranged to fund the purchase and conversion before the HMO licence is in place. The licence is obtained during the bridging term, and you then refinance onto an HMO mortgage once the property is licensed and tenanted.

What is an Article 4 direction and how does it affect HMO finance?

An Article 4 direction removes permitted development rights for converting a property to an HMO, meaning you need full planning permission. Many university cities have Article 4 areas. This doesn't prevent you from getting finance, but it affects which lenders are willing to lend and may require planning consent before drawdown.

What yields should I expect from an HMO?

HMOs typically generate 8–15% gross yields compared to 4–6% for standard BTL — the premium reflects higher management intensity and regulatory compliance. Net yields vary by location, room count, and quality of finish. Lenders will assess the rental income during the refinance valuation.

Can I include conversion costs in the bridging loan?

Yes. We structure facilities that cover both the purchase price and the conversion costs (en-suite bathrooms, fire doors, fire alarm systems, room partitions). Build costs are released in stages as works progress.

What fire safety works will I need for an HMO?

At minimum: fire alarm system (LD2 standard for HMOs), fire doors to all habitable rooms and kitchen, emergency lighting, fire blankets in the kitchen, and clear escape routes. For larger HMOs (6+ beds), automatic fire suppression may be required. Budget £5,000–£15,000 depending on the property.

How many rooms make it worth converting to an HMO?

Generally 4+ rooms to justify the additional management and compliance costs. The sweet spot is 5-7 rooms, which balances yield uplift against licensing complexity. Properties with 3 or fewer rooms may not generate enough premium over standard BTL to warrant the HMO route.

Can I refinance an HMO back onto a standard BTL mortgage?

No — most standard BTL mortgages don’t cover HMOs. You need a specialist HMO mortgage product. We help you plan the refinance from the outset so there are no surprises when the bridging term ends.

Do HMO lenders care about the council licensing regime?

Yes. Lenders want to see that the property is licensable (or already licensed) and that you understand the requirements. Mandatory licensing applies to HMOs with 5+ occupants forming 2+ households. Additional licensing schemes vary by local authority. We guide you through the requirements.

Deals We've Structured

All case studies

£950k

£950k HMO Conversion

Bolton