Pepper Money launches new HMO mortgage product

Pepper Money has launched a new product for houses in multiple occupation (HMOs).

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.

The HMO product will be available on portfolios of up to 10 properties, with rates starting from 5.19% up to a maximum 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.

Terms are available up to 35 years, and lending is available to age 85.

The latest product launch follows the lender’s return to the buy-to-let market last month.

Paul Adams (pictured), sales director at Pepper Money, said: “Our new HMO product is the latest in a series of new developments centred around supporting landlords.

"As a specialist lender providing specialised products, we know that landlords are operating within an increasingly complex regulatory environment and navigating affordability challenges which are affecting their behaviour.  

"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.”