YBS Commercial Mortgages has made a series of significant changes to its buy-to-let products for houses in multiple occupation (HMOs), aiming to broaden access and provide more flexibility to professional landlords.

The lender has raised the maximum loan-to-value on its HMO offering to 75% of either the market or vacant possession value, whichever is lower, for properties with up to six bedrooms. This marks a notable improvement from the previous cap of 65% of market value or 75% of vacant possession value. The changes are accompanied by a rate cut, with a new five-year fixed rate available at 5.45% up to 75% LTV, down from 5.65%.

For larger HMOs – those with seven bedrooms or more – the lender will now permit borrowing up to 70% of market value, with five-year fixed rates starting at 5.65%.

In addition to the LTV increase, YBS Commercial has also raised the maximum loan amount available on an HMO from £1.5 million to £3 million per property. The upper limit on the number of bedrooms has been extended to 20, compared with the previous cap of 12. The lender has also doubled its maximum aggregate exposure on HMO lending to £10 million per customer, subject to landlords demonstrating a proven track record in the sector.

The move comes amid growing demand for shared housing across the UK, particularly among students and younger tenants seeking affordable rents. HMO properties, which are typically let to three or more unrelated tenants sharing common facilities, have become an increasingly popular investment choice for landlords looking to maximise yields.

Angela Norman, managing director at YBS Commercial Mortgages, said: “We’re really pleased to demonstrate our continued support for landlords in this sector, especially as we’ve seen the need for HMOs increase in recent years due to the rise in average rents outstripping wage inflation, making it difficult for young or low-income earners to rent a property exclusively.

“We’re delighted to tailor our offering – based on feedback from brokers – and making our products more accessible to a wider cross-section of landlords, as well as allowing them to borrow more.

“These changes demonstrate our continued commitment to ongoing improvements which benefit the commercial market and all our brokers and customers.”