The Government has recently made further changes to the licensing requirements of Houses of Multiple Occupancy (HMO’s) which means a further estimated 177,000 HMO’s may now require a license! If affected you may soon receive a letter from your lender demanding you either revert the property back to a single residence or pay back the loan immediately!
Why is this, given you have always maintained your payments I hear you ask? Well, when a bank lends money on a mortgage it basically gauges the risk you present (of not paying back your loan) and prices the mortgage accordingly (ie: more risky means higher interest rate and costs). Given most landlords will have made no changes to their properties whatsoever, have maintained all payments to their lenders and the changes have been brought in solely by the Government it may seem unfair but the fact the property is now a HMO, it falls into a different and higher risk bracket than a traditional buy-to-let! Therefore, your lender may well be entitled to demand you change the property status or force you to re-mortgage immediately.
What can be done? At Financial Fortress we are experts in all things home finance and work with the entire market. We have up to the minute understanding of all lenders and legislation changes so your adviser will ensure you remain fully compliant whilst benefitting from the best rates in the market. Contact your local experts today to help build your Financial Fortress!