House of Multiple Occupation: Finding the Right Valuation Approach

The situation

A property investor approached us to refinance four city-centre HMOs, ranging from five bedrooms to sixteen bedrooms. The objective was to maximise borrowing capacity to support further acquisitions.



The challenge

With HMOs, the valuation can be just as important as the interest rate. A conventional residential valuation may focus on bricks-and-mortar value, while an established HMO can potentially be assessed on an investment basis.

All four properties were within an Article 4 area, so planning considerations also needed to be understood.

Finding a way forward

We identified a lender whose criteria and valuation approach were aligned with the client's objectives and who was comfortable with the established HMO use and investment valuation approach.



The outcome

Competitive mortgage terms were secured across the four properties, with the valuation approach supporting the client's objective of maximising borrowing capacity.



With specialist property, the lender's approach to valuation can be just as important as the headline mortgage terms.