- To buy an HMO property that needs refurbishing before being let
- To buy a property to be converted into an HMO
- To re-finance an existing HMO property for a refurbishment programme
- To re-finance commercial property for conversion to an HMO
There are various lending options available for professional landlords looking to purchase, or remortgage any type of property that requires refurbishment, renovation, or full conversion, before being let.
There are two basic funding scenarios:
Improvement work to be non-structural in nature and not requiring planning consent or building regulations approval. No change to the overall use/nature of the property. Limit for cost of works to be no more than 15% of day 1 value/purchase price of the property.
Improvement or conversion work requiring planning consent and/or building regulations approval and where a change of use may be required. Cost of works can exceed 15% of day1 value/purchase price.
Lenders will allow further funds to be drawn on the mortgage, which can take the total borrowing up to 75% of the improved property value (or in some cases 90% of purchase price + cost of works) after the improvement works have been completed
For applicants looking to buy, or remortgage any residential or commercial property to be converted for use as an HMO, or for an existing HMO property requiring refurbishment. All property types considered.
The Light Refurbishment and Heavy Refurbishment categories allow the following scope of works:
Light Refurbishment details
Applicants should have owned their main residence, or an investment (BTL or HMO) property for at least 12 months. Applicants should ideally have some previous experience of similar projects, and be able to show sufficient funds for the proposed work. A good level of personal income is essential and a reasonable credit history is required.
Types of property
Existing HMOs requiring a light refurbishment before being let. Properties requiring extensive renovation, or conversion to an HMO. Conversions to blocks of flats and renovations of blocks of flats
Student accommodation, or properties designed for working professionals where assured shorthold tenancies will be put in place. Lenders will also consider properties to be leased to a local authority or housing association.
Tenancy types accepted for the finished property