The Leeds Building Society is expanding its range of mortgages for houses in multiple occupation (HMOs) just a month after announcing their first foray into this area.
Their new five-year products all have free standard valuation and the incentive of £500 in cashback, and include:
- 49% available up to 60% LTV (loan to value) with a £999 fee for small properties
- 69% available up to 70% LTV with a £999 fee for small properties
- 54% available up to 60% LTV with a £1,999 fee for large properties
- 84% available up to 70% LTV with a £1,999 fee for large properties
Adding to recent new product range
A range of two-year HMO products were unveiled in early January, and the newly-launched five-year deals are also available for small and large HMOs. The Leeds define ‘small’ as a property up to and including six occupants, while ‘large’ is for over six. The maximum number of bedrooms for both definitions is eight.
“We became the only lender to offer specific products tailored to small and large HMOs when we launched in January,” says Matt Bartle, the Leeds’ Director of Products. “Since introducing the range, we’ve worked closely with our broker partners to refine our products to ensure they meet the needs of borrowers.
“Following broker feedback we’ve developed these new five-year options for small and large HMOs, which we believe will meet the needs of landlords looking to diversify their portfolios and move into this sector.”
“Additionally, insight from brokers revealed professional landlords often prefer to use their own legal advisers during the buying or remortgaging process. We’ve listened to brokers and introduced £500 cashback across our new five-year HMO range, which could be put towards conveyancing costs should the landlord choose.”
The Leeds’ move follows changes to legislation affecting the HMO sector that came into force in 2018. Landlords now have to apply for HMO licences, regardless of the number of stories in their property – previously, the minimum number was three.
Increased potential for student market
This means that thousands more landlords need to apply for a licence, but it also potentially brings thousands of properties into the range of landlords who want to convert one into an HMO.
The student market expanding and one that should HMO landlords. The competitiveness of the market was brought into focus recently when Which? revealed that 27% of first-years had already found their second-year accommodation by the end of the November of their first term.
