The changes come in response to the new rules governing HMOs, introduced in April, which mean landlords must have a licence for properties where more than five unrelated people are living.
CHL believes that by clarifying its position on HMOs and enhancing its lending criteria, it will help mortgage intermediaries overcome any initial uncertainties and place HMO business.
Trevor Child, head of marketing at CHL, said: “CHL Mortgages is one of the first buy-to-let lenders to clarify its position on registered HMOs in a simple and straightforward manner. This clarity will win us incremental business because brokers will know where they stand on such properties. In short, we lend on registered HMOs.”
CHL will now base rental cover on the rent obtained from individual rooms, rather than the entire property. It will also allow HMO lending on its full product range and it will consider any property, as long as it meets its acceptable property criteria.
To accompany these changes, CHL has also enhances the criteria on its buy-to-let and new-build product ranges.
It has scrapped personal income checks on its buy-to-let range, will allow up to 85 per cent loan-to-value on new-build flats and it has raised the maximum number of flats it will lend on in a new-build block to 25 per cent or 10.
Simon Chalk, mortgage planner at Mortgage Portfolio Services, said: “It’s a positive move. The dust is beginning to settle and with one month before they become compulsory, it’s good to get some clarification. I’ve had four HMO cases on the go and they were a real problem as I had lenders running around trying to answer straightforward questions. Recognising individual rooms is also a good thing. Now we need other lenders to give clear guidance on HMOs.”
