HMO Bridging Loans
Bridging Finance - HMO
The HMO play has a financing gap in the middle: buy an ordinary house, convert and license it, then refinance as an income-producing HMO at its new value. Term lenders won't fund the middle, the property is a building site with no HMO licence yet. That middle is exactly what a bridge is for.
Buying the property
Auction Pace · No Licence Needed Yet
Bridging completes at auction pace and doesn't mind that the property is currently a tired three-bed with no licence, we lend on residential investment security at up to 70% LTV, from 0.79% per month. Buying through an SPV or limited company is standard for HMO investors and standard for us.
Funding the conversion
Works, from light reconfiguration to full conversion with en-suites and fire compliance, can be funded alongside the purchase with refurbishment finance. Size the term honestly: conversion, building control, licensing and tenanting rarely fit inside six months. Terms run to 24 months so the licence application and first tenancies can complete before you refinance.
The exit
Named At The Start
The usual exit is a specialist HMO mortgage against the converted, licensed, income-producing property, typically at a valuation reflecting its rental income rather than bricks alone. A sale to another investor works too. We will want the exit named at the start: which lender type, at what value, on what income assumptions.
The middle, funded
Where the bridge fits.
Tell us the property, the works budget, and the intended room count and rent for a same-day answer.
- Buy the ordinary house, at auction pace, through an SPV if that's your structure
- Convert and license, works funded alongside the purchase, term sized for building control, licensing and tenanting
- Refinance or sell, onto a specialist HMO mortgage at the income-based valuation, or a sale to another investor
Common questions