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HMO & Multi-Unit Finance
The difference between a bricks-and-mortar valuation and an investment valuation on the same HMO can be the difference between your capital coming out or staying trapped. Most declines I see here were avoidable.
HMOs are among the highest-yielding assets in UK property and among the most awkward to finance, and the awkwardness is exactly why I like them. Valuation methodology, licensing, Article 4 directions and planning classes all change which lenders will play and on what basis. Get those variables right and an HMO refinance releases capital; get them wrong and the same property traps it.
Let me say the quiet part plainly: valuation basis is where the money is. The same house can be valued as a house or as an investment reflecting its income, and the gap between the two can be enormous. Which basis you get depends on the property, the letting model and, critically, the lender you choose, because lenders instruct valuers differently. Choosing the lender whose valuation approach suits your deal is the single most valuable decision in HMO finance, and it is made before the application, not after.
I arrange HMO and multi-unit freehold block finance across the full spectrum: six-bed licensed houses, sui generis HMOs of seven beds and up, student and professional lets, Article 4 areas with established use, and blocks of flats on one title. And on BRR deals I arrange the bridge and the exit mortgage together, so you know what the refinance should release before you ever exchange. That is how deals other brokers declined become deals that complete.
Written by Chris Adlam
Founder of Advanced Funding Solutions. Chris has arranged specialist property finance since December 2013 and personally packages and places every deal the firm takes on. Book a call with him directly.
Also see: Student HMO Mortgages · BRR & Conversion Bridging · Bridging Loans · Free BTL Rental Calculator
The deals other brokers decline are the ones we complete. Five minutes is enough to know if we can help.
Frequently asked questions
It depends on the property, the location and the lender. Larger HMOs with genuine commercial character are more likely to be valued on an investment basis. We target the lenders whose valuation approach suits your deal, because that choice can change the outcome significantly.
Yes. Article 4 removes permitted development rights for new HMO conversions, which makes established HMOs in those areas more valuable, not less. Lenders want evidence of the established use, and we package it.
You buy and refurbish on a bridging loan, then refinance onto an HMO mortgage at the improved value, ideally recycling most of your capital into the next deal. We arrange both stages together so the exit is agreed in principle before you commit. All lending is subject to credit underwriting.
A multi-unit freehold block is several self-contained flats on one freehold title. Specialist lenders fund them on an investment basis, often more generously per unit than single BTLs, and we know which lenders lead at each block size.
Question not answered? WhatsApp Chris directly or book a call, it is quicker than email.
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