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Case Study


Unlicenced HMO

This case study looks at an unlicenced 5 bed HMO remortgage to release funds.


As a result of the of the changes to HMO Licencing rules, which made all properties let to 5 or more un-related tenants subject to mandatory licencing rules, councils were inundated with licence applications in certain areas.


A client contacted Balanced who had a 5 bedroom HMO which would now require a licence from 1 October 2017 (where it hadn’t previously). The licence application had been submitted in time as required and the relevant council had confirmed receipt, but due to demand 12 months later the relevant council had still not processed the licence application.


Main lender concern with the case

Mandatory licence was not in place

Additional considerations

Limited Company remortgage combined with the simultaneous removal of a company director
Some rents were paid quarterly in advance
Some tenants on a combined AST and others on separate AST
Portfolio landlord
Property recently underwent full renovation and value increase
Capital raising was required for further future property investment


Each of the points above created a complex scenario which many lenders could not consider due to one or more of the points above.


Balanced Financial Services had thorough conversations with a specialist lender, and after explaining thoroughly the situation, evidencing that the landlord had done everything in their power to comply with the regulations and expert packaging, the lender were able make a policy exception and grant a formal mortgage offer on standard terms within their standard pricing structure.


This was possible due to Balanced Financial Services excellent relationship with lender Business Development Managers and our open and honest approach with underwriters.


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