Published 20 September 2012 · Last reviewed 6 April 2013 · Older article — see current rates
n the recession Entrepreneurs are getting more adept and maximising property opportunities as capital is king right now. One of the principle methods they are using is the division of rooms within a house for multiple tenants. So if you are thinking of buying a buy-to-let for the first time Houses In Multiple Occupation (HMOs) might just be the place for you to start.
For HMO-eligible lenders on the bridging panel, see the transparent bridging calculator.
Niche Advice has recently launched a conventional HMO mortgage product to cater for this and we would be happy to talk and walk you through the process, however, the real money is in spotting the potential in a property that is not already converted and licenced.
In this instance you will need to use bridging finance for the renovation and then a remortgage to a conventional mortgage product as soon as the lenders will allow – which is normally six months.
The bridge finance will be costly but this approach is about a long term strategy of maximising the rental yield of the property. If you want a quick but lower return traditional buy-to-lets is probably the way for you.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.