Fleet Mortgages has made significant updates to its mortgage offerings specifically designed for houses of multiple occupation (HMOs), effective from August 23, 2024. These changes aim to provide more flexibility and competitive options for landlords who are either purchasing or remortgaging HMOs, a sector that continues to grow in the UK private rental market.

Key Updates:

1. New Two-Year Fixed-Rate HMO Mortgage:
   • Interest Rate: 6.49%
   • Loan-to-Value (LTV): Up to 75%
   • Fixed Fee: £1,999
   • Maximum Lending Amount: £750,000
2. Reduced Rate on Five-Year Fixed-Rate HMO Mortgage:
   • New Interest Rate: 5.54% (a reduction of 35 basis points from 5.89%)
   • Fee: 3% of the loan amount, with a minimum charge of £750
   • Maximum Lending Amount: £1 million

Strategic Rationale:

Steve Cox, the chief commercial officer at Fleet Mortgages, emphasized that these updates are designed to meet the growing demand among landlords for higher rental yields, which HMOs can often provide. The introduction of a new two-year fixed-rate mortgage offers landlords a shorter-term option, while the reduced rate on the five-year product provides a more attractive long-term choice. Cox noted that these changes reflect the lender’s strategy to cater to the diverse needs of landlord borrowers in a dynamic market.

Market Impact:

Fleet Mortgages anticipates that the HMO sector will become increasingly important in the UK rental market, offering benefits to both landlords seeking higher rental income and tenants looking for more flexible living arrangements. By expanding and refining its product offerings, Fleet Mortgages aims to support the growing trend of landlords investing in or converting properties into HMOs.

Background:

Founded in 2014 and headquartered in Fleet, Hampshire, Fleet Mortgages specializes in buy-to-let and niche mortgage products. The company was acquired by Starling Bank in 2021, a deal valued at £50 million, combining cash and shares. This acquisition has allowed Fleet Mortgages to continue expanding its offerings in the competitive buy-to-let mortgage market.

Landlords and advisers interested in these new products can find more details in Fleet Mortgages’ product guide and lending criteria, available on the company’s website.