Fleet Mortgages to accept shared accommodation on standard BTL

The lender intends to value the properties on a room-by-room basis and allow locks on bedroom doors as well as the usage of downstairs rooms as bedrooms.

The move followed its latest product overhaul, which featured two new pay rate lifetime trackers and increased maximum loan to values (LTV) to 75%.

From 22 September Fleet also reduced the number of years’ experience it requires from landlords of houses in multiple occupation (HMO) from three to two years, as long as they have owned the property for that long.

It further reduced the minimum valuation on converted freehold properties outside London and the south east from £150,000 to £100,000.

Chief executive officer Bob Young (pictured) said the changes reflected the types of landlords and properties that were seeking mortgage finance from the lender.

He said: “We are reflecting on the varied house price situation outside London and the south east by dropping our minimum valuation requirement there, whilst also opening up our HMO range to those with two years’ experience in this sector and acknowledging that shared accommodation, with the necessary caveats attached, is acceptable for our standard buy-to-let range.”

Clamping down on rogue landlords

HMO landlords have come under the spotlight in recent months with the government attempting to tighten licensing requirements to clamp down on rogues.

In a consultation published on 18 October the government said it wants to protect vulnerable people, who it believes, are more likely to be housed in HMOs than in the wider private sector.

In early 2016, more than 33,000 homes were inspected by local authorities leading to almost 2,800 rogue landlords facing prosecution for providing substandard homes, it said.

The government proposed to apply licensing rules to all shared homes with five or more people from multiple households and to flats attached to business premises.

Currently licensing only kicks in for homes with three or more floors and excludes homes attached to businesses, unless they are in three-storey buildings.

Under the new rules landlords who fail to obtain a licence can also be criminally prosecuted and will be liable to pay a potentially unlimited fine, the government said.