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    Finance for HMOs is a specialist area and can be more difficult to obtain than mainstream residential finance. Operators should consider the complexity of the regulations governing such properties, the need for additional planning consent and an HMO licence for the operator.

    An HMO is a House in Multiple Occupation – roughly described as a house in which a number of unrelated people live, in their own self contained rooms, but who share communal facilities.

    A more accurate definition is provided for in law, as prescribed by  the Housing Act 2004 which  introduced a new definition of a House in Multiple Occupation (HMO) from  2006 in England and Wales.

    If you let a property which is one of the following types it is likely to be an HMO:

    An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.

    A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.

    A converted house which contains one or more flats which are not wholly self contained (ie the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households.

    A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.

    In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence and the same will apply to properties which are used as domestic refuges.

    For further information, there is an excellent resource available at:

    It is our opinion that there will be an increasing demand for HMO rooms as the impact of recent changes to housing benefit starts to bite – the so called “bedroom tax” whereby single tenants are only paid housing benefit for one bedroom. This may force tenants to rent smaller properties and individual rooms rather than multi bedroom properties.

    Finance for HMOs is available, and as you might expect, we know who to approach to obtain the best LTV’s, rates and terms in the market.

    If you are investing into HMOs, please approach Key Commercial Finance for the best HMO finance.

    Please use our contact form for a quick response to your enquiry.

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