Fleet Mortgages has reintroduced two five-year fixed-rate product options for House in Multiple Occupation (HMO) and Multi-Unit Freehold Block (MUFB) properties, which could significantly benefit landlords and investors. These products, available from today, offer flexible fee structures and competitive rates, catering to the growing demand for rental properties.
What are the new product options?
The reintroduced products from Fleet Mortgages come with two distinct fee structures: a zero-fee option at a rate of 6.09% and a fixed-fee option priced at £1,499 with a lower rate of 5.99%. Both options are available for loans up to 75% Loan to Value (LTV) and can be used for either purchasing or remortgaging HMO and MUFB properties, with a cashback incentive of £1,000 upon completion.
How do these changes impact landlords?
Landlords looking to invest in HMOs or MUFBs will find these new options particularly appealing. The competitive rates and cashback offer can help mitigate some of the costs associated with property transactions. Moreover, the flexibility of choosing between a zero-fee or fixed-fee structure allows landlords to select the option that best suits their financial situation, potentially enhancing their rental yields.
What should brokers and investors watch for?
Brokers should pay close attention to these new offerings as they can provide valuable financing solutions for clients interested in HMO and MUFB investments. The reintroduction of these products follows a series of criteria enhancements by Fleet Mortgages, including the acceptance of joint applications involving foreign nationals and company group structures. This could open up opportunities for a broader range of clients, particularly those with more complex financial situations.
What this means for HMO borrowers
For borrowers interested in HMOs, the reintroduced products from Fleet Mortgages provide greater choice and flexibility in financing options. The removal of minimum income requirements and the reduction of trading history for self-employed applicants from two years to one full tax year are significant changes that could facilitate access to mortgage products for a wider audience. Additionally, the increase in the maximum mortgage term to 35 years and changes to LTV ratios for new-build flats further enhance the attractiveness of these offerings.
Frequently asked questions
What is an HMO?
A House in Multiple Occupation (HMO) is a property rented out by at least three people who are not from one household but share facilities like the bathroom and kitchen. This type of property can offer higher rental yields compared to standard buy-to-let properties.
How can I apply for these mortgage products?
Interested borrowers can apply for these mortgage products through Fleet Mortgages directly or via a mortgage broker. It’s advisable to check the lender’s criteria and ensure you have all necessary documentation ready for a smooth application process.