Fleet offers HMO guide

The adviser guide details the differences between a standard buy-to-let mortgage and an HMO, where an HMO licence is required, the pros and cons of investing in these types of properties and converting a standard property to an HMO. It also details exactly how the underwriters at Fleet approach each case.

Fleet’s HMO loans are assessed for rental on a room by room basis and the property value on a comparable evidence basis. All the products come with a 2% fee.

Bob Young, chief executive officer of Fleet Mortgages (pictured), said: “HMOs are becoming an increasingly popular option for investors. Higher rental yields are achievable and mortgages for such properties are more accessible in today’s market. It is therefore important for clients to understand the advantages, disadvantages and responsibilities associated with letting HMOs before making any decisions to purchase or convert a property.”

In March, the Prudential Regulation Authority released a consultation paper outlining the regulator’s clearly renewed interest in assessing the borrower alongside the property. Young quite controversially stated buy-to-let lenders have nothing to fear from measures like tighter affordability checks and the definition of a portfolio landlord as a minimum of four properties.

Responsible lenders have ‘nothing to fear’ from PRA proposals – Fleet Mortgages

He said: “Essentially it can be boiled down to the rather simple lending maxim of, ‘Only lending to those that can afford it’, and I am rather surprised that other lenders operating in this sector would not be following the same common-sense thinking. In a very true sense, buy-to-let lending has come on leaps and bounds since the credit crunch and I think both lenders and landlords are much better prepared now for any similar downturn that might afflict us.”