HMO Conversion Finance

Up to

75% LTGDV

Commercial investment value

Rates from 0.85%
Up to 90% on day one
Low touch monitoring
Fast drawdowns

Specialist finance for HMO conversion

Specialist funding for converting property into a House in Multiple Occupation, structured against the commercial investment value of the completed scheme. Designed for experienced developers and investors, our HMO conversion finance offers enhanced leverage and flexible terms to accommodate planning, permitted development and licensing requirements.

Product Guide

Deals we fund

Colenko provides finance for multi-tenanted properties across a range of planning and use classes, including HMO conversions under C3 and Sui Generis, and supported living schemes under C2, C3(b) and C3(c).

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Permitted Development

Article 4

Supported Living

Sui Generis

Key facts

Loan amount	£300,000 to £2 million
Loan term	Up to 18 months
Monthly rate	From 0.85% per month
LTGDV	Up to 75%
LTV (net)	Up to 75%
Valuation basis	Investment value
Security	First charge
Ownership	Individual or SPV

Full Product Guide

Our process

We structure HMO conversion finance to reflect the planning route, licensing framework and investment exit.

1. Evaluate

We assess planning requirements, licensing obligations, the build team and programme, along with the proposed exit strategy.

2. Optimise

We structure the facility and loan conditions to align with your build timeline and any planning or licensing milestones.

3. Execute

We provide strong day one funding and operate a streamlined monitoring process, releasing funds efficiently as the conversion progresses.

Contact our sales team

Mark Marlow

Head of Sales
mark@colenko.com
020 4576 9470

Lee Moran

BDM, London and South
lee@colenko.com
020 7948 9706

Why choose Colenko?

Choosing a lender is about more than rate. With Colenko, you gain a proactive partner, clear communication at every stage, and the necessary experience to keep your transaction moving from first conversation through to completion.

Clarity

We lend with a clear understanding of your circumstances, providing full transparency on what we can offer. By assessing your situation thoroughly, we deliver funding that works from the outset.

Communication

We keep you informed throughout the process with clear, straightforward updates. You can move forward with confidence, supported by consistent and reliable communication.

Commitment

When we issue terms, we stand behind them. We navigate complexity, overcome challenges, and remain committed every step of the way to ensure your loan progresses smoothly to completion.

Highly Commended Bridging Lender of the Year 2025 NACFB

What our clients say

Here’s what clients say about working with Colenko. From first conversation to completion, we focus on clear communication, practical solutions, and keeping deals moving.

“I had a really positive experience with Colenko. The team stepped in and helped complete the deal smoothly. They were proactive throughout and communication was clear from start to finish. The process was well managed and efficient. I’d happily recommend them.”

Marianne, Kensington

“Our broker recommended Colenko and, given our tight timeframe and first auction purchase, we were initially a little hesitant. However, the team were excellent from the start. They were supportive, attentive and kept us updated while guiding us through the process.”

Olu, Lewisham

“We’ve worked with Colenko on several transactions and the experience has always been smooth. The team act quickly to ensure deals complete on time, even with tight auction deadlines. Their responsiveness and efficiency make the whole process straightforward.”

Michael, Oxford

Frequently asked questions

How does finance for HMO conversion work?2026-03-03T17:18:34+00:00

How does finance for HMO conversion work?

It provides funding to purchase a property and convert it into an HMO. The lender will assess the planning route, licensing requirements and projected commercial investment value before confirming terms. Funds are usually released for purchase and then in stages as works progress.

How much can I borrow on day one of an HMO conversion project?2026-03-03T17:18:58+00:00

How much can I borrow on day one of an HMO conversion project?

Day one borrowing depends on leverage and scheme strength. Gross advances can be high, but the net amount available after fees and interest allowances will be lower. The final figure will reflect valuation, exit strategy and the developer’s experience.

Can I borrow against commercial investment value for an HMO conversion?2026-03-03T17:19:21+00:00

Can I borrow against commercial investment value for an HMO conversion?

Yes, in many cases, funding is structured against the commercial investment value of the completed HMO rather than just the existing value. The projected rental income, location and licensing position will influence the valuation and available leverage.

Can I fund 100% of the conversion works?2026-03-03T17:19:43+00:00

Can I fund 100% of the conversion works?

Often, yes. Many HMO conversion facilities are structured to cover the full cost of works, subject to surveyor approval and staged drawdowns. You’ll still need to demonstrate sufficient contingency and overall scheme viability.

Can I fund an HMO conversion in an Article 4 area?2026-03-03T17:20:05+00:00

Can I fund an HMO conversion in an Article 4 area?

Yes, but planning rules are stricter. In Article 4 areas, permitted development rights may be removed, meaning full planning permission is usually required unless a lawful development certificate was secured before the directive came into force. The planning position will be reviewed carefully before terms are issued.

Can I carry out an HMO conversion under permitted development rights?2026-03-03T17:20:24+00:00

Speak to the HMO conversion finance team

Securing or converting to an HMO? Speak to our team about specialist funding and structured terms.