The competition among lenders to attract landlord customers remains intense. Fleet Mortgages has recently updated its range of products tailored for Houses in Multiple Occupation (HMOs). The new addition is a two-year fixed-rate HMO mortgage, offered at an interest rate of 6.49%. This product is available for loans up to 75% of the property’s value.
The mortgage comes with a fixed fee of £1,999 and allows for borrowing up to a maximum of £750,000. This move by Fleet Mortgages reflects the ongoing efforts of lenders to capture a share of the HMO market by offering competitive and tailored financial products to landlords.
Fleet Mortgages has announced changes to its product range for Houses in Multiple Occupation (HMOs). The lender has introduced a new two-year fixed-rate HMO mortgage, offering a competitive interest rate of 6.49%. This product is available for up to 75% loan-to-value and includes a fixed fee of £1,999. The maximum borrowing amount for this mortgage is capped at £750,000.
In addition to the new two-year option, Fleet Mortgages has also reduced the interest rate on its existing five-year fixed-rate HMO mortgage. The rate has been lowered by 35 basis points, from 5.89% to 5.54%. This mortgage comes with a 3% fee, with a minimum charge of £750, and allows for borrowing up to £1 million.
Steve Cox, Chief Commercial Officer at Fleet Mortgages, explains the rationale behind these changes. “Our objective was to broaden our HMO product offerings. We’ve successfully added a new two-year fixed-rate mortgage while also making a significant reduction to the rate on our five-year fixed-rate option.”
Cox further elaborates on the importance of these options for landlords. “Offering both shorter- and longer-term mortgage choices is crucial. It provides landlords with the flexibility to select a product that best suits their financial goals and property management strategies.”
Overall, these adjustments reflect Fleet Mortgages’ commitment to meeting the diverse needs of HMO landlords and enhancing their borrowing choices in a competitive market.
Fleet Mortgages is optimistic about the growing role of the Houses in Multiple Occupation (HMO) market. They believe that this sector will become increasingly crucial, benefiting both landlords and tenants. Additionally, they expect the HMO market to play a significant role in the UK private rental sector, contributing to its overall dynamics and growth.
Fleet’s recent adjustments to their HMO mortgage products reflect this belief. The company has introduced a new two-year fixed-rate HMO mortgage, set at 6.49%, available with a 75% loan-to-value ratio. This product includes a fixed fee of £1,999 and offers a maximum borrowing limit of £750,000. The update aims to provide landlords with more options tailored to their specific needs in the HMO space.
Furthermore, Fleet has also reduced the rate on its existing five-year fixed-rate HMO mortgage by 35 basis points. The previous rate of 5.89% has been lowered to 5.54%. This product comes with a fee of 3%, which has a minimum charge of £750, and allows for borrowing up to £1 million. These changes are intended to make Fleet’s offerings more competitive and appealing to landlords.
Steve Cox, Fleet’s Chief Commercial Officer, emphasized the importance of offering both short- and long-term mortgage options for landlords in the HMO sector. He stated that having a range of products, including both two-year and five-year fixed rates, provides borrowers with greater flexibility and choice. This approach allows landlords to select the most suitable mortgage based on their specific goals and financial plans.
In addition to Fleet’s updates, CHL Mortgages has also made changes to its limited edition buy-to-let (BTL) range, focusing on small HMOs and multi-unit freehold blocks (MUFBs). The new offerings include two-year fixed-rate mortgages with fee options ranging from 0% to 3.5%, and five-year fixed-rate mortgages with fee choices of 0%, 3.5%, or 7%. For self-contained units with up to six bedrooms, there are two-year fixed-rate mortgages available with a 0% fee, as well as five-year fixed-rate options with either 0% or 7% fee choices. These updates are designed to provide more flexibility and cater to various investor needs in the property market.
CHL Mortgages’ Commercial Director, Ross Turrell, sheds light on the current focus of landlords seeking to improve their rental yields. He notes that many landlords are reassessing their existing property portfolios to identify opportunities for increasing rental income. This process involves a strategic look at their holdings to find ways to enhance financial returns.
Turrell highlights that Houses in Multiple Occupation (HMOs) have emerged as a significant property type for landlords aiming to achieve higher rental yields. HMOs are known for generating more income compared to traditional single-let properties, making them an attractive option for investors looking to boost their rental income.
As a result, there is a noticeable trend of landlords either actively pursuing new HMO properties or considering converting their existing properties into HMOs. This shift represents a proactive approach to managing and expanding their rental portfolios to capitalise on the higher income potential offered by HMOs.
This increased interest in HMOs is part of a broader strategy to maximise returns and enhance the profitability of rental investments. By focusing on properties with higher income potential, landlords are making strategic decisions to ensure their portfolios remain competitive and financially viable.
Overall, Turrell’s comments reflect a growing trend among landlords towards more strategic and income-focused investment decisions within the private rental sector. This shift underscores the importance of adapting to market conditions to optimise rental yields.
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