HMO and MUFB
HMO and MUFB
Here’s our handy guide to house in multiple occupation (HMO) and multi-unit freehold block (MUFB) products.
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What’s an HMO?
A House in Multiple Occupation (HMO) is essentially a residence occupied by at least three individuals who are not all part of the same family and who share amenities such as bathrooms, toilets, or kitchens.
So, if a house meets these conditions, it’s considered an HMO, no matter how many rental agreements there are or who the renters are.
What’s needed
What’s needed for HMOs
to be acceptable?
Landlord experience
Only experienced landlords are accepted, not first-timers.
Multiple lets
It’s okay for there to be multiple rental agreements.
Rental valuation
The rental income should be assessed based on similar properties being rented out separately.
Maximum number of bedrooms
There can’t be more than 12 bedrooms.
Required stress cover
Sufficient liability insurance and savings set aside for property upkeep and emergencies.
Tenants
Tenants with diplomatic immunity aren’t accepted.
Minimum valuation
The property needs to be valued at least £200,000 in London or £100,000 elsewhere.
Income coverage ratio
Your income should comfortably cover your expanses and show you can manage your finances effectively.
HMO licence
If needed, the conveyancer (legal advisor) should confirm that an application for the license has been made before the purchase is completed.
What’s an MUFB?
A multi-unit freehold block (MUFB) is a setup where several separate living spaces are owned together under one freehold. This can include:
- Buildings specifically made as flats without separate lease agreements for each unit.
- Houses that have been turned into flats without individual lease agreements.
- Several houses all owned under one freehold.
Here’s how we can help
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