HMO Bridging Finance
HMO Bridging Finance at Market-Leading Rates
About
HMOs (Houses in Multiple Occupation) are a powerful way for landlords to maximise rental yields—but they often fall outside the scope of standard mortgages. When you’re purchasing, refurbishing, or converting a property into an HMO, speed and flexibility are critical.
That’s where HMO bridging finance comes in.
At Aura Capital, we arrange fast, flexible HMO bridging loans at market-leading rates, helping landlords, investors, and developers unlock the full potential of their multi-let properties.
What is HMO Bridging Finance?
An HMO bridging loan is short-term property finance used for:
Buying an existing HMO
Converting a single dwelling into an HMO
Funding refurbishments or extensions on an HMO
Releasing equity to fund additional projects
Unlike standard buy-to-let finance, HMO bridging lenders are comfortable with:
Properties with multiple tenants on ASTs or licences
Larger HMOs requiring planning or licensing
Properties needing refurbishment before they’re lettable
Complex income streams and rental calculations
When to Use an HMO Bridging Loan
Purchase unmortgageable HMOs – properties without fire safety compliance, adequate amenities, or valid HMO licences.
Conversions – turning a single dwelling into an HMO or expanding an existing one.
Auction purchases – complete in 28 days, even on complex HMO stock.
Portfolio growth – release equity from an existing HMO to fund your next acquisition.
Refinance delays – bridge the gap until long-term HMO mortgage funding is ready.
Why HMOs Need Specialist Finance
HMO lending is more complex than standard buy-to-let because lenders must consider:
Licensing requirements – properties with 5+ tenants across 2+ households often need local authority licensing.
Planning rules – some areas require planning permission for HMO use (Article 4 restrictions).
Rental valuations – HMOs are often valued on rental income/yield rather than bricks and mortar.
Management structures – lenders want evidence of professional management in place.
This is why bridging finance is so effective: it allows you to secure and improve the property first, then refinance onto a long-term HMO mortgage once all criteria are met.
Typical HMO Bridging Finance Terms
Loan sizes: £50,000 – £25m+
Rates from: 0.55% per month (broker-only market-leading rates)
LTVs: up to 75% (higher with additional security)
Terms: 3–24 months
Speed: completions in as little as 7–14 days
Example Scenarios
Converting a Single Dwelling into an HMO
An investor buys a 3-bedroom house for £180,000 with plans to convert it into a 6-bed HMO. Aura Capital arranges an HMO bridging loan within 12 days. The investor refurbishes the property, adds en-suites, and secures an HMO licence. Once fully let, the property refinances onto a long-term HMO mortgage, valued at £300,000.
Expanding an Existing HMO
A landlord owns a 5-bed HMO worth £400,000 but wants to convert the loft to add 2 more rooms. Aura Capital secures a bridging loan releasing £100,000, covering works and refinancing costs. After the conversion, the property is revalued at £550,000 and refinanced onto a specialist HMO mortgage.
Risks & Considerations
While HMO bridging finance is powerful, investors should consider:
Exit strategy – lenders need a clear plan (sale or HMO mortgage refinance).
Valuation risk – HMO properties are often valued on income; weak rental demand can lower valuations.
Short-term cost – bridging loans are more expensive than term mortgages but provide flexibility.
Licensing delays – ensure your local authority licence applications are in progress to avoid refinancing delays.
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HMO Bridging Finance is a short-term loan designed for investors purchasing or refurbishing Houses in Multiple Occupation (HMO). With loan amounts ranging from £50,000 to £25 million and funding available in as little as 10 days, it offers a fast and flexible way to acquire or upgrade properties whilst receiving funding for the improvements made to the property. The loan typically lasts between 3-24 months, with no credit scoring and no upfront or exit fees.
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Yes, some lenders, including Aura Capital, offer HMO Bridging Finance with No Valuation. This speeds up the approval process and eliminates delays caused by formal property assessments. It is particularly useful for investors looking to complete time-sensitive purchases, such as auction properties or distressed sales.
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ast Funding: Access funds in as little as 10 days.
High LTV: Up to 80% net of the property’s value.
No Credit Scoring: Approval is based on property potential.
100% Refurbishment Costs Covered: Ideal for conversions or upgrades.
No Upfront or Exit Fees: Transparent and cost-effective financing.
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An Article 4 Direction restricts permitted development rights, meaning full planning permission may be required to convert a property into an HMO. Investors should check local regulations before purchasing. Our bridging loans can help secure properties in these areas while awaiting planning approval.
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The BRRR (Buy, Refurbish, Rent, Refinance, Repeat) strategy is a popular HMO investment method:
Buy a property using bridging finance.
Refurbish using 100% refurbishment funding.
Rent it out to tenants to generate income.
Refinance with a long-term HMO mortgage to repay the bridging loan.
This strategy allows investors to maximize returns with minimal upfront capital.
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A clear exit strategy (refinancing or sale).
Experience in property investment (preferred but not required).
Property suitability, ensuring it meets licensing and regulatory requirements.
Ability to provide security, typically through the HMO property itself.
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Most lenders offer up to 75% of the property’s value, but this can vary. We are able to offer up to 80% net on certain HMO’s where there is a solid business plan and exit strategy in place.
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Approval can take as little as 12 hours, depending on the lender, valuation basis and your application.
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Yes, many investors use bridging loans to fund property refurbishments or conversions.
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It’s crucial to have a solid exit strategy. If you’re unable to repay, you may face additional fees or need to refinance.
Frequently asked questions
Why Choose Aura Capital?
Whole-of-market access – we compare dozens of specialist HMO lenders
Market-leading rates – broker-only deals that beat direct pricing
Speed – auction-ready completions in as little as a week
Expert guidance – structuring HMO finance to fit licensing, planning, and rental goals
End-to-end support – from purchase to refinance, we manage every step
Secure Your HMO Bridging Loan Today
If you’re buying, converting, or refinancing an HMO, Aura Capital can secure you a fast, flexible bridging loan at market-leading rates. With our whole-of-market access, we’ll tailor finance to your project and ensure you exit cleanly onto long-term HMO funding.
