The new product criteria will treat small HMOs as standard properties, while the minimum property value will be reduced to £120,000.
The refreshed range will include:
- Two-year fixed rates from 3.09% at 75% loan to value (LTV), and will include small HMOs of six bedrooms or less
- Five-year fixed rates from 3.59% at 65% LTV
- Trackers from 3.10% + London Interbank Offered Rate (LIBOR) – currently at 3.62%
- Two-year fixed rates for large HMOs (seven bedrooms or more) from 3.59%
- No early redemption charge (ERC) trackers from 3.10% plus LIBOR
Paul Brett (pictured), managing director of intermediaries at Landbay commented: “HMOs can offer extremely attractive rental yields, but letting out one property to multiple tenants does come with its complexities.”
He continued: “That doesn’t however mean the lending criteria always needs to be, especially when managed by a specialist lender.”
“Landlords have had a job on their hands coming to terms with recent tax and regulatory reform, and many experienced investors have been reviewing their portfolios, increasingly looking to HMOs to boost rental income and protect profits. I hope these changes will be well received by any broker with a HMO case to place,” added Brett.