Who’s Winning, Who’s Wobbling, and What It Means for Landlords This Year
If you’ve been active in the HMO space during 2025, you’ll know it’s been anything but quiet. The mortgage market has been teeming with activity, with new entrants innovating and long-established names refining their strategies. While some lenders have made bold moves, others have quietly adjusted their strategies. Did you choose the right lender at the right time this year? Your deal likely sailed through. If not? You probably know the pain of a last-minute down-valuation or a surprise “no” that left you scrambling.
Let’s take a closer look at who’s made headlines in the HMO lending arena this year and what landlords need to know moving forward.
Birmingham Bank
One of the loudest arrivals of 2025 has been Birmingham Bank. Birmingham Bank aggressively entered the small HMO investment valuation market in 2025, specifically focusing on properties with six beds or more. That alone gave landlords some fresh firepower, especially those working with properties that didn’t quite fit the mold for traditional buy-to-let lending.
It was a bold move, and it forced everyone to sit up and pay attention. Birmingham Bank did not merely dabble in the market; they made a decisive move.
Paragon
Paragon remains the old faithful. Having been in the HMO space for a longer period than most, their understanding of this market is unparalleled. If you want reliability, they’re often the first name on the list.
But, and there’s always a but, their in-house valuation team can be fussy. Valuation has caught many experienced landlords off guard by undermining a deal they believed to be solid. If you’ve previously worked with Paragon, you probably understand my point.
They’re not wrong; they are just thorough, and that makes knowing your competitors, your specs, and your local market more important than ever when you go down this route.
Kent Reliance & Shawbrook
Kent Reliance has continued to be a solid presence in the market, particularly for those quirky HMO setups or slightly messy portfolios. They know how to price risk and tend to give experienced landlords room to move.
Shawbrook, on the other hand, has tightened up. Their appetite for HMO lending hasn’t disappeared, but their criteria have become more rigid, and you now need a cleaner, better-prepared case to get a “yes” than you did a year ago.
Even with these shifts, both remain top-tier lenders and are still very much in the game for the right type of deal.
Hampshire Trust Bank & Quantum
While the big names continued to do their thing, Hampshire Trust Bank and Quantum have been quietly moving up the ranks. Both have shown serious flexibility and hunger for complex HMO projects, particularly heavy refurbishments, larger conversions, and non-standard layouts that other lenders might shy away from.
If your HMO features multiple kitchens, unconventional layouts, or unique planning requirements, these two lenders have emerged as formidable contenders, frequently demonstrating greater agility in their risk and value assessment processes.
Large HMOs & Sui Generis
Once you hit a seven-bed or larger HMO, you’re in a different league, one that typically falls under sui generis planning, meaning the property no longer fits into standard use class definitions. That shift brings a new level of scrutiny and, almost always, a “red book” valuation, where the property is assessed based on its income, not just bricks-and-mortar comparables.
This shift has the potential to significantly impact investors. When done right, it can unlock significantly higher valuations and borrowing power. But it also demands precision: clean tenancies, strong rental demand, compliance across the board, and ideally a team behind you who’s done it all before.
2025: The Year Lenders Started Competing Again
Here’s the good news: lenders are back in competition mode. After a cautious couple of years post-pandemic and during economic uncertainty, 2025 has seen renewed appetite, and when lenders compete, landlords win.
Rates have started to sharpen, terms are more negotiable, and innovation is back on the table. For experienced investors with a strong pipeline, the market is full of opportunity. If you’re not well-guided, the abundance of options for newer landlords can lead to missteps.
Takeaway
The HMO mortgage market in 2025 isn’t just busy; it’s evolving. We’re seeing new lenders challenge the status quo, old players redefine their terms, and landlords push boundaries on what’s possible with planning, layout, and valuation.
But all this noise means one thing: you need to know who to approach and when. That’s not something a spreadsheet or rate sheet will tell you. It comes from being in the market every day, having conversations with underwriters, and knowing which lender wants your deal before you even submit the application.
Working with a broker who specializes in the HMO space not only provides assistance, but also gives you an unfair advantage.
If you are preparing for your next HMO move, please ensure you are collaborating with the right team. In this market, that’s the difference between a smooth deal and a slow, costly learning curve.
Who’s Winning, Who’s Wobbling, and What It Means for Landlords This Year
If you’ve been active in the HMO space during 2025, you’ll know it’s been anything but quiet. The mortgage market has been teeming with activity, with new entrants innovating and long-established names refining their strategies. While some lenders have made bold moves, others have quietly adjusted their strategies. Did you choose the right lender at the right time this year? Your deal likely sailed through. If not? You probably know the pain of a last-minute down-valuation or a surprise “no” that left you scrambling.
Let’s take a closer look at who’s made headlines in the HMO lending arena this year and what landlords need to know moving forward.
Birmingham Bank
One of the loudest arrivals of 2025 has been Birmingham Bank. Birmingham Bank aggressively entered the small HMO investment valuation market in 2025, specifically focusing on properties with six beds or more. That alone gave landlords some fresh firepower, especially those working with properties that didn’t quite fit the mold for traditional buy-to-let lending.
It was a bold move, and it forced everyone to sit up and pay attention. Birmingham Bank did not merely dabble in the market; they made a decisive move.
Paragon
Paragon remains the old faithful. Having been in the HMO space for a longer period than most, their understanding of this market is unparalleled. If you want reliability, they’re often the first name on the list.
But, and there’s always a but, their in-house valuation team can be fussy. Valuation has caught many experienced landlords off guard by undermining a deal they believed to be solid. If you’ve previously worked with Paragon, you probably understand my point.
They’re not wrong; they are just thorough, and that makes knowing your competitors, your specs, and your local market more important than ever when you go down this route.
Kent Reliance & Shawbrook
Kent Reliance has continued to be a solid presence in the market, particularly for those quirky HMO setups or slightly messy portfolios. They know how to price risk and tend to give experienced landlords room to move.
Shawbrook, on the other hand, has tightened up. Their appetite for HMO lending hasn’t disappeared, but their criteria have become more rigid, and you now need a cleaner, better-prepared case to get a “yes” than you did a year ago.
Even with these shifts, both remain top-tier lenders and are still very much in the game for the right type of deal.
Hampshire Trust Bank & Quantum
While the big names continued to do their thing, Hampshire Trust Bank and Quantum have been quietly moving up the ranks. Both have shown serious flexibility and hunger for complex HMO projects, particularly heavy refurbishments, larger conversions, and non-standard layouts that other lenders might shy away from.
If your HMO features multiple kitchens, unconventional layouts, or unique planning requirements, these two lenders have emerged as formidable contenders, frequently demonstrating greater agility in their risk and value assessment processes.
Large HMOs & Sui Generis
Once you hit a seven-bed or larger HMO, you’re in a different league, one that typically falls under sui generis planning, meaning the property no longer fits into standard use class definitions. That shift brings a new level of scrutiny and, almost always, a “red book” valuation, where the property is assessed based on its income, not just bricks-and-mortar comparables.
This shift has the potential to significantly impact investors. When done right, it can unlock significantly higher valuations and borrowing power. But it also demands precision: clean tenancies, strong rental demand, compliance across the board, and ideally a team behind you who’s done it all before.
2025: The Year Lenders Started Competing Again
Here’s the good news: lenders are back in competition mode. After a cautious couple of years post-pandemic and during economic uncertainty, 2025 has seen renewed appetite, and when lenders compete, landlords win.
Rates have started to sharpen, terms are more negotiable, and innovation is back on the table. For experienced investors with a strong pipeline, the market is full of opportunity. If you’re not well-guided, the abundance of options for newer landlords can lead to missteps.
Takeaway
The HMO mortgage market in 2025 isn’t just busy; it’s evolving. We’re seeing new lenders challenge the status quo, old players redefine their terms, and landlords push boundaries on what’s possible with planning, layout, and valuation.
But all this noise means one thing: you need to know who to approach and when. That’s not something a spreadsheet or rate sheet will tell you. It comes from being in the market every day, having conversations with underwriters, and knowing which lender wants your deal before you even submit the application.
Working with a broker who specializes in the HMO space not only provides assistance, but also gives you an unfair advantage.
If you are preparing for your next HMO move, please ensure you are collaborating with the right team. In this market, that’s the difference between a smooth deal and a slow, costly learning curve.
