The maximum LTV has been increased from 65% to 75%, based on the property’s market value or vacant possession – whichever is lower – for HMOs with up to six bedrooms.
Borrowers taking this deal can benefit from a five-year fix cut from 5.65% to 5.45%.
For HMOs with more than seven bedrooms, the maximum LTV is now 70% of market value, allowing landlords to benefit from a five-year fix at 5.65%.
The changes also mean that landlords can now borrow up to £3m instead of the building society’s previous cap of £1.5m per property. The product is available for HMOs with up to 20 bedrooms instead of 12.
There is also an increase to the maximum exposure secured on HMOs that a customer can hold with YBS Commercial Mortgages to £10m – up from £5m – subject to demonstrating a successful track record as an HMO landlord.
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Rising need for HMOs
Angela Norman, managing director at YBS Commercial Mortgages, said: “We’re really pleased to demonstrate our continued support for landlords in this sector, especially as we’ve seen the need for HMOs increase in recent years due to the rise in average rents outstripping wage inflation, making it difficult for young or low-income earners to rent a property exclusively.
“We’re delighted to tailor our offering – based on feedback from brokers – and making our products more accessible to a wider cross-section of landlords, as well as allowing them to borrow more.”
Average monthly private rents rose 7.4% year-on-year to £1,335 in April, a slightly lower growth rate than the 7.7% recorded in March, according to the latest figures from the Office for National Statistics (ONS).
