Houses in Multiple Occupation (HMOs) can offer significantly higher yields than standard buy-to-let properties. However, they require specialist mortgage products, appropriate licensing and careful management. This guide covers what you need to know.
HMO Lending Criteria
- • Most lenders require landlord experience (usually 12+ months)
- • Higher deposits — typically 25–30%
- • Appropriate HMO licence must be in place or applied for
- • Property must meet fire safety and space standards
Yield Potential
A well-managed HMO can deliver 8–15% gross yields compared to 5–7% for a standard single-let property. The higher management burden is offset by significantly stronger cash flow.