Pepper Money has launched its new product for Houses of Multiple Occupation (HMOs). The new & improved product suite centres around maximising inclusive mortgages for a broader customer base.
Pepper’s HMO offering will enable limited companies and landlords with at least 12 months of homeownership experience to mortgage or remortgage on new and existing HMO houses of up to six bedrooms, provided the property is appropriately licensed at the time of completion.
Pepper Money is responding to a gap in the specialist lending market for landlords looking to expand and diversify their portfolios. The HMO product will therefore be available on portfolios of up to 10 properties, with rates starting at just 5.19%, and a maximum Loan-to-Value (LTV) of 75%, on properties with a current Energy Performance Certificate (EPC) rating of A-C.
Pepper’s affordability assessments will be based on rental income receivable from the property, without the need to provide personal or business bank statements as proof of income. Multiple sources of funds are also accepted to pay deposits, including gifts, director loans, and existing equity. Credit scores aren’t used as part of the assessment of applications.
Pepper takes a human approach to underwriting, assessing mortgage applications on a range of factors beyond just rental income and credit scoring in order to build a clearer picture. This makes Buy to Let mortgages more accessible and flexible for landlords.
Pepper Money’s products are aimed at ensuring practicality and affordability, and its landlord-focused product suite is no different. Terms are available up to 35 years, and lending is available to age 85, meaning borrowing is accessible for those at the very start of their investment journey, as well as those looking for income to bolster or act as their pension.
Paul Adams, Sales Director at Pepper Money, said: “Our new HMO product is the latest in a series of new developments centred around supporting landlords.
While traditional credit checks are valuable, our approach offers a broader view of financial health, promoting responsible lending and renting practices. HMOs play a vital role in the UK’s private rental market, offering an affordable and accessible option in the face of rising rental demand and a growing gap between the amount of supply available. Landlords are an essential part of a viable property market, and our latest product offering aims to provide specialist solutions to help landlords remain in the market.
Pepper Money is committed to developing a broad range of products and services and working collaboratively with brokers, with a streamlined underwriting process, delivering competitive rates and high-quality service for a section of the market that is so often overlooked by high street lenders.”
