Pepper Money unveils HMO mortgage amid shifting BTL landscape

Pepper Money has unveiled a new House of Multiple Occupation (HMO) mortgage product for both limited companies and individual landlords.

It’s available for existing HMO houses with up to six bedrooms.

The move follows Pepper Money’s re-entry into the buy to let last month.

It says the HMO mortgage is designed to address a gap in specialist lending, enabling landlords to expand their portfolios with up to 10 properties.

Product supports landlords

Rates start at 5.19%, with a maximum loan-to-value of 75% for properties holding an Energy Performance Certificate rating of A-C.

Affordability is assessed using rental income and the deposits can come from diverse sources, such as director loans.

The lender’s sales director, Paul Adams, said: “Our new HMO product is the latest in a series of new developments centred around supporting landlords.

“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.”

BTL market continues to cool

Meanwhile, data from Twenty7tec highlights a shifting BTL market in May 2025.

It says that while the market continues to cool, BTL mortgage searches increased.

The data shows remortgage searches rising 7.3% and purchase searches growing 4.3% compared to April.

However, year-on-year figures show a declining trend, with BTL purchase searches down 11.7% from May 2024.

That accounts for just 14.8% of total searches – a near-record low.

Plus, the firm says, it reflects a continuous steady decline from the 23.9% peak in 2018.

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