The Intermediary – September 2025 - Flipbook - Page 85
B RO K E R B U S I N E S S
Case clinic
While total income supports the mortgage,
lenders have thus far varied in their treatment of
secondary income streams. Some required two
years’ history for freelance or side income, while
others discounted the Airbnb earnings altogether.
The applicant is hoping to secure a deal which
takes all of their earnings into account.
C AS E T H R E E
HMO purchase with
licensing requirements
UNITED TRUST BANK
This scenario is a prime example of where
a specialist lender comes into its own,
including United Trust Bank (UTB), which will
accept multiple sources of income to support
affordability.
The freelance design work appears to be
self-employed income, therefore we would
require two years’ evidence of this by way of
SA302s, which will also hopefully show the
required two years’ evidence of the Airbnb
income as profit from UK land and property.
However, it is unclear from the scenario
description what deposit the applicant has.
This would determine whether this would meet
our loan to income lending requirements.
landlord is purchasing a five-bedroom
property valued at £425,000 with a 30%
deposit, intending to let it as a house in
multiple occupation (HMO). They have previous
landlord experience, but no HMOs in their
portfolio.
The local authority requires a licence for this
type of property, and planning permission for
change of use has only been approved in the past
two weeks.
The landlord expects a strong rental yield of
£3,000 per month, but has yet to put formal
management arrangements in place.
A
MOLO FINANCE
HARPENDEN BS
Here at Harpenden Building Society, we pride
ourselves on being experts in complex income
situations. Therefore, we would accept all incomes
in this example, as long as the second working
income was received for a minimum of six months.
We would ideally look for evidence of the Airbnb
income showing on tax calculations, but can
potentially work in the absence of this if we can
understand why.
BUCKINGHAMSHIRE BS
The society may consider using secondary income,
subject to its consistency. The proportion of this
income that can be included will depend on how
stable and regular it is. Income generated from
hosting via Airbnb within the applicant’s own
home may present challenges; however, it could be
considered on a case-by-case basis.
TOGETHER
Together could support this applicant with all
their income sources subject to affordability and
valuation. The salaried employment can be used as
long as they have been in continuous employment
for 12 months, even if they are in a probationary
period. We could take into account additional
income to assess affordability, including the
Airbnb earnings, as long as two years’ income can
be evidenced.
The applicant’s experience as a landlord would
meet our requirement of having held a buy-to-let
property for at least 12 months, even though they
have not previously managed an HMO.
The recent planning approval would not prevent
us from progressing, provided that the licence
application is in place.
Our HMO criteria allow lending on properties of
up to 12 rooms, with one set of products and rates
across the range. Subject to the usual underwriting
and confirmation of satisfactory management
arrangements, this case could be supported.
FLEET MORTGAGES
Fleet offers a dedicated HMO product range and
can accept properties with up to six bedrooms.
Our maximum LTV is 75%, so a 30% deposit is
more than sufficient.
For HMO cases, we require a minimum of
12 months’ landlord experience.
During the legal process, all necessary planning
permissions and licences will be checked to ensure
compliance.
FOUNDATION HOME LOANS
This would be acceptable to Foundation. We’d
rely on solicitors to check that planning has been
agreed and would also require an HMO licence
application to be submitted, with solicitors to sign
→
off that the licence will be attainable. ●
September 2025 | The Intermediary
83
