Recent changes in buy-to-let (BTL) offerings from The Mortgage Works (TMW) and Molo represent a significant shift within the HMO property sector, enhancing accessibility and affordability for landlords. TMW now allows mortgage applications from shareholders with a minimum 20% stake in the company, eliminating the previous requirement for all applicants to be directors. This move addresses the evolving needs of limited company landlords, marking a progressive step towards streamlining the financing process, particularly for those investing in HMOs.
Moreover, TMW’s introduction of intercompany loans as eligible deposit sources further emphasises its commitment to support the BTL market. As commented by Damian Thompson, TMW’s director of landlord, these adjustments are designed specifically in response to feedback from landlords and brokers alike. Such innovations signify a growing recognition of the diverse financial structures that limited company landlords employ, indicating a willingness to adapt to an ever-changing property landscape.
In addition to TMW’s changes, Molo has also made strides by reducing BTL rates by up to 20 basis points, with two-year fixed rates now starting at 2.83%. Notably, their competitive pricing extends to specialist BTL products, particularly those relevant to HMOs and Multi-Unit Freehold Blocks (MUFB). This pricing strategy positions Molo as a strong contender in the financing space, benefiting investors who manage larger properties with six or more rooms, as there are no additional fees for such configurations.
These developments signal a broader trend in the UK HMO market where lenders are prioritising the needs of landlords amidst shifting market conditions. With competitive rates and simplified application processes, both TMW and Molo are enhancing the financial landscape for HMO investors. This is particularly timely as more landlords and investors are seeking out diversified financing solutions, reflecting a strong demand for HMOs despite economic uncertainties.
