YBS Commercial Mortgages has expanded and enhanced its Housing of Multiple Occupation (HMO) product offering, introducing a new structure based on property size and improving terms for a wider range of landlords.
Among the most significant changes is an increase in the maximum loan-to-value (LTV) ratio for HMOs with up to six bedrooms, now set at 75% of the lower of market value or vacant possession value. This replaces the previous cap of 65% of market value. Borrowers can now access a five-year fixed rate at 5.45%, down from 5.65%, up to 75% LTV.
For larger HMOs with more than seven bedrooms, YBS Commercial Mortgages is now offering loans up to 70% of market value, with five-year fixes available from 5.65%. These properties can now include up to 20 bedrooms, a notable increase from the previous limit of 12.
The lender has also doubled the maximum loan size per property to £3m, up from £1.5m, and increased the overall exposure limit for HMO lending per customer to £10m, subject to the landlord demonstrating a successful track record.
Angela Norman, managing director at YBS Commercial Mortgages, said: “We’re really pleased to demonstrate our continued support for landlords in this sector, especially as we’ve seen the need for HMOs increase in recent years due to the rise in average rents outstripping wage inflation, making it difficult for young or low-income earners to rent a property exclusively.”
She added: “We’re delighted to tailor our offering – based on feedback from brokers – and making our products more accessible to a wider cross-section of landlords, as well as allowing them to borrow more. These changes demonstrate our continued commitment to ongoing improvements which benefit the commercial market and all our brokers and customers.”
The lender defines HMOs as properties let to three or more individuals from different households sharing communal facilities, with growing demand particularly evident among students.
