Landbay has introduced two new buy-to-let mortgage products for first-time landlords who want to invest in houses in multiple occupation (HMO).
The buy-to-let provider claims that most lenders require HMO borrowers to have some experience as a landlord before lending on this type of property. But Landbay says it is responding to broker feedback which has revealed more enquiries are coming from well informed first-time landlords who are attracted by the higher yields HMOs can bring.
Landbay’s new products are available for HMOs with up to six bedrooms and includes new build property.
The two-year fixed rate is set at 3.49% and the five-year fix is 3.79% with both products up to 70% LTV and a 1.5% fee.
Paul Brett (pictured), Landbay’s managing director, intermediaries, said: “Landlords are becoming more sophisticated and they understand the responsibilities of managing an HMO. They have done their homework and know the yields on HMOs are much higher than single flats or houses resulting in greater financial rewards.
“There is also more demand for living in HMOs, particularly from young professionals who want or need to share a house. Some simply can’t afford to rent their own place but many actually like communal living. Much of the HMO accommodation is far better quality than it used to be and can demand a higher rent.”