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What is HMO Finance?

What is HMO Finance?

HMO finance is specifically for a house of multiple occupancy. This is a specialist asset class where a single property is subdivided and individually rented out to different people who can share some common areas such as bathrooms and kitchens. They are different from purpose-built flats/properties, as they usually will have been converted from larger single buildings. We work with a range of lenders who provide mortgages specifically for HMOs.

Use our flow diagram to help you decide if you fall into the definition of an HMO and if HMO finance is what you need.


When done well, HMO properties can offer stronger yields than BTL properties.

Who is it for?

HMO mortgages are intended for landlords who already have a few simple properties, operating either as an individual or a business.

Further Information

Read our HMO factsheet for more information about HMO licenses.

Read an interview with one of our clients, Sanjay Kumar, about his HMO investment strategy.

Watch video interviews between Property Investor News, Karl Griggs, and our client Sanjay Kumar about investing in HMOs.

Investors looking to take out an HMO mortgage under the name of a limited company should refer to our Limited Companies / Special Purpose Vehicles section.

Top Tips

Putting a lock on every room is not the same as an HMO. If you do not ensure that your property is HMO-specific, valuers and lenders may only see it as having the value of the family home it once was.

It is particularly important with HMOs to make sure it is a high-quality property in order to get the desired long term return on investment. You should also make sure that it follows regulations regarding minimum room sizes.

Be aware of local council legislation, for example where there is an Article 4 Direction in the area. This will have an impact on the planning permissions needed for conversion into an HMO.

Get in touch today to discuss your HMO finance plans in more detail.

+44 (0)1923 655441