Funding HMOs in 2025: Inside the Lender’s Mind with Together Finance

In this week's episode, I’m joined by Ryan Etchells from Together. Ryan is the Chief Commercial Officer at Together, one of the UK’s leading specialist lenders. With a huge lending book, a strong appetite for HMOs, and years of experience in the sector, they really know their stuff.

What you’ll discover today is that Ryan brings a unique and valuable perspective from the lender’s side of the table. He shares some brilliant insights—and, more importantly, practical advice—that could help you strengthen your applications and build better relationships with lenders.

So, if you’re finding it tough to get the results you want from a lender, or if scaling your property business has hit a financing wall, then this episode is one you don’t want to miss!

Topics covered in this episode:

• 03:13 - Understanding Together Finance and Its Unique Approach
• 07:43 - Current Trends in HMO Lending and Market Dynamics
• 12:45 - The Importance of Relationships with Lenders
• 17:04 - Defining a Good Deal in the HMO Market
• 34:54 - Case Study: A Unique HMO Investment Story

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Transcript

Andy Graham (00:02.67)

Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses. I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

In today's episode, I am joined by Ryan Etchells from Together Finance. Ryan is the chief commercial officer at Together. They're a huge lender. They've got a massive lending book, a real appetite for HMOs and tons of experience in this sector. They've been doing it for a long time. I think what you're about to find out today is that Ryan is able to give us a really unique and fascinating insight into what's required from a lender's perspective. And Ryan also shares some really great bits of advice, things that you and I can do that might help our applications and help build better relationships with a lender like Together. If you're struggling, if you're not perhaps getting the results that you want from a lender, if you're struggling to scale your business up and finance may be a part of it, then today's episode is definitely one you want to stick around for. Please sit back, relax and enjoy today's episode of the HMO Podcast.

Andy Graham (01:29.738)

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment, but before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one-stop shop. Inside the roadmap, you'll find a full 60 lesson course delivered by me, teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future. 

We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from. And we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. 

To find out more, head to theHMOroadmap.co.uk now and come and join our incredible community of HMO property investors.

Andy Graham (02:40.462)

Hi Ryan, thanks for joining me on the podcast today.

Ryan Etchells: Great to be here, thanks.

Andy Graham: So Ryan, this is quite a unique episode for us and our listeners because you are a member of the Together Finance team and it's very rare that we get to sit down and have conversations like this and perhaps get the insight that I'm hoping to get today from the banks and the lenders, which is obviously such a critical part of what we as investors need to be able to engineer into our deals to make everything work. So Ryan, perhaps before we get kicked off. Could you introduce yourself? What your role is at Together Finance? Perhaps tell us a little bit more about Together Finance, what it is that you guys do and perhaps how you're a little bit different to the traditional lenders.

Ryan Etchells:  Yeah, absolutely. So I'll start with Together first. We've been in the lending business for 50 years now. We're a very mature business and we were founded on the premise of people out there that maybe fall out of being able to supported by banks, people that have a lot of ambition in what they want to achieve, but need a finance partner that is willing to understand their circumstances, spend time to build a relationship with them and really understand their ambitions and support them. And what I mean by that is that particularly over the last 15 years, the role of the digital environment has become more prominent in the financial services industry. And a lot of the big banks have removed people out of their processes, which can create problem for investors because they need to be able to engage with a lending provider, engage with people that have common sense and are willing to listen to them and again, understand their ambitions and what they're trying to achieve. And we've noticed that that's been very different over the last 10 to 15 years in mainstream banking. And you know, this isn't me kind of saying that their model is wrong. Absolutely not. That the big banks support a big, big amount of the mortgage market, a big amount of the buy to let market.

We definitely have seen that niche that we operate in and that specialism we provide has grown over the past 10 to 15 years. And we've then grown with them. You know, our balance sheet now is about 8 billion pound of lending. So we've got quite a big lending book and that's across predominantly buy to let commercial mortgages. We've got a really big presence in the bridging finance market, which we'll touch on as we move through this, I think as a real opportunity for investors to use, to purchase properties in a really quick and short term way. So yeah, that's the part of the market that we operate in. Those customers that are really looking for that desire to have a relationship with the lender and be understood and for us to understand them, that's where we operate. Me personally, so I've been with Together now for, actually started in 2007 back with Together. Had a brief break, but then came back in 2021 and my role has a really grand title, Chief Commercial Officer.

And what that actually means is that I'm responsible for the front end of the business. By front end, I mean building those relationships with customers, developing the products that our customers need, setting the price. So anybody listening right now will, will recognise that it's been a really difficult few years in terms of price. And I'm probably the person that they'll be looking at thinking how come pricing has been changing so much over the past few years, but we've had to adapt to a really interesting

Ryan Etchells (06:16.814)

rate environment over this past two to three years. And it's not been easier. There's been a generation of financial services professionals that have grown up in this uniquely low base rate environment. Base rate was at probably 0.1 since 2009, I'd say. So then as it started moving up in 2022, 2023, everybody had to adjust to that and understand what it meant. So it's been a really challenging time for pricing. But yeah, so that's a bit about my role. cover all parts of the front end of the business.

Andy Graham: Thanks, Ryan. And you're absolutely right. think I'm sure every one of our listeners is just nodding along at the minute thinking it has been a bit of a roller coaster from a rates perspective. Hopefully things are starting to look a little bit better and a bit more predictable, but I'm sure we'll come on to that conversation shortly. Yeah. Yeah. But it's not just been rates, has it? It's been the pandemic. It's been, you know, more recently stuff that's happening over in the US there's just been so much uncertainty and instability. It's been really difficult, I think on all sides of the buying and selling market. And that's been a real challenge for us as investors. 

One question Ryan that I'd love to ask you just to get started is what kind of deals do you at Together Finance typically like to do and what is your appetite for HMO deals right now? And I guess I'm asking in the context of, it is harder to get the returns now. I don't think anybody's really disputing that from a landlord's perspective and HMOs have continued to stand that test of time. In my opinion, they've become more mainstream.

The student market has always been pretty mainstream, but I professional HMOs and other types of HMOs are becoming more mainstream, but that has to be facilitated by lending. So there's obviously more lending going on, but I'm really interested to understand a bit more about what you guys think really from a professional perspective and looking ahead. What do you think that HMO market looks like and what does that landscape have in the near future and what's your appetite like for lending on that sort of stuff?

Ryan Etchells (08:08.884)

Yeah. So I guess the first place to start is the, we recognise that the buy to let market and the landlord market over this past, I'd say definitely over the past five years, but you could probably extend that out for about 10 years now. It's been under a lot of pressure and attack, I think is the right word. We've got a great slide that I use when I'm explaining to my board about what's been going on in the buy to let market over the past few years.

If I go down it over different changes, private rented profit, portal, private rental sector, ombudsman, licensing regulation changes, cap on tenancy deposits, charges on long-lawed tax release, changes to capital gains tax. There's been a lot of change going on in the landlord market over the past, definitely the last five years, the rise of incorporation as well. And landlords have had to really adjust to that. It's not been easy. Ithink on top of that as well, there's been this bit of a media blitz around landlords and obviously there's some bad examples out there over the past few years. You know, I live in Manchester. There was the Rochdale case, particularly around the mould, but the media have really accentuated those negative stories. So I think the whole buy to let sector and investor sector has been, it's had to deal with a lot over this past five years. And one of the outputs of that is that all those things I talked about, and especially the rising rate environment has squeezed yield. It's squeezed and the dynamics and economics of, of how buy to let works. 

And so what we've been noticing is that landlords have been looking to diversify and to try and find that yield and to try and find opportunities to diversify the portfolios in order to be able to maintain the cash flows and maintain their position. We've seen that a lot with semi-commercial where landlords have been looking at how they can extend into units that have got some retail elements and some residential elements, shops with flats, things like that, but also fully commercial units as well. But then particularly, obviously for the conversation we're having the rise of HMOs. We've, at Together, we did three and a half thousand buy to let transactions last year, of which 350 were for HMOs.

Ryan Etchells (10:29.23)

And that's not counting properties that were bought to then convert into HMOs. That was funding for pre-existing HMOs. So about 10% of what we did were HMO. If I rewind that clock back five years, that was about 1% of what we did. So over this past five years, we've seen a real move and a real shift of customers out there again, diversifying portfolios. And that's a trend that we're expecting to see continue over this next five years.

Not just in HMOs, in semi-commercial and commercial as well. We're definitely seeing landlords trying to move into different markets to try and find yield. From the lender's perspective, that's great for us because obviously the number one thing from a lender is making sure that a buy to let portfolio or a commercial portfolio is self-funded. So that race to yield and that diversification of portfolio is something that we're really keen to see because we want to make sure that landlords are taking on assets that can fund the mortgage that sits in the background. So we expect that trend to continue over the coming years. We expect to see landlords continue to diversify, to look for that yield in all those asset classes that I talked about, semi-commercial, commercial, HMOs. And I guess that's the most important thing for a lender and that what we want to see is assets that are self-funding, that are able to repay mortgage. That's the sacrosanct thing for a lender, obviously. So as we see that move to those asset classes that are more high yield producing, that's music to our ears. The challenge obviously that presents investors and why people like Together exist is that when you're looking at those assets that are more yield producing, are probably a little bit less easy to underwrite from a bank's perspective. That's where investors will need a lending partner that's willing to have that relationship with them. I'm willing to look at those transactions, look at those assets that are producing those yields and really support the landlord and the investor with the finance that they need and building that relationship with them that hopefully over the course of years will that the investor will grow alongside the lender as well.

Andy Graham (12:45.102)

I think as an investor myself, who has struggled for years really trying to develop those sorts of relationships with lenders and not really ever feeling like anybody wants to understand, let alone actually understands, that has definitely been a real challenge and that can make it difficult to predict outcomes. It can make it difficult to actually put a plan together, bring resources in to try and build that sort of a business. And that's definitely something that I know a lot of our community has struggled with. So to hear you talk about these sorts of things and how higher priority this is for you as a lender. I think it's really, really great to hear. And just go back, this is a slide on your assumptions about how the HMO lending market is likely to continue increasing. I think you do at 10% of your lending work now is HMOs. What do you think that that percentage might look like in five years time, Ryan? Have you got any thoughts or ideas or are you willing to stick your neck out that far?

Ryan Etchells: So I guess under the first thing is that unfortunately you've met Together too late. If you'd have met us five years ago, you'd have probably done a lot more. That's the call out to anybody listening to this book. But seriously though, the interesting bit is I was discussing this with a colleague a couple of days ago. The characteristics of the HMO market probably five years ago, there was a lot of purchasing of property to convert. But because the assets then once you've spent the money to convert, because the assets are so valuable, we'd always a lot of the time we'd find investors would then keep hold of the asset to generate. So we've got a lot of experience in auction finance and bridging finance. And traditionally you'd see a lot of people purchase a property, spend the money and then flip it on. But with HMOs we're seeing the opposite. You'd see purchase the property, get the license, convert the property and then turn it out into a buy to let transaction or whatever that might be.

So that was a real trend that we saw over about five years, landlords buy and then landlords keep. Last year we saw the highest number of transactions in the market as a whole. I think I've got that there, yeah. So in 2023, 27,000 HMOs were purchased rather than purchased and converted, purchased as a HMO. That was 2018, that was 3000, 2023, that was 27,000.

Ryan Etchells (14:58.488)

So we're now seeing that secondary market start to come through where maybe the original investor has held the asset for five years and is now looking to exit because whatever they've decided to move on and do something different. So that secondary market is now starting to really come through, which we wasn't seeing at the start. So we're anticipating HMO market will grow quite significantly over the next five years. 

So as a proportion of our book, I mean, my actual ambition is that we grow the whole buy to let book so that HMOs remain 10 % and I'm doing 10 % of a much bigger number. That's always the aspiration, but I do anticipate that HMOs will become a bigger part of our book because we're seeing a lot of growth there and we're seeing landlords transition to it. But in terms of the market as a whole, I think our estimation is we'll see probably 10% growth, compounded annual growth over the next five years. We'll see it really, really growing and picking up. And that's two reasons, first one is that move to yield, but the second one is definitely that secondary market. Investors now buying previously converted HMOs from previous investors. We're definitely seeing that come through.

Andy Graham: It's interesting. And I think what I've definitely noticed and observed over the last five years is the real professionalization of the sector, the whole buy to let sector. A lot of people have been pushed out. More people have come in, have done so with very big ambitions. We're seeing large funds, even the banks enter the space now. And your average landlord who wants to stay in the game is really, I think, having no choice other than to really sort of professionalise their business.

And actually I think that's a really good thing to see, but one of the by-products of that, I think has been that the economics in deals combined with the constraints of the market that we've seen over the last few years have made it increasingly difficult to get the returns that perhaps we were moving in the HMO space just five years ago. And that's something that I suspect is going to continue as more people continue to enter the market. So I'm really interested and from your perspective, Ryan, what do you guys think a good deal looks like? Because we can ask our community members and investors.

Andy Graham (17:04.619)

And often what we see is quite a high benchmark on what the returns and expectations should be from HMO, but sometimes a real challenge in actually getting lenders to buy into that at first. And it's not to say that lenders are wrong. We know that banks sell risk, but sometimes I think investors' expectations can actually be a little bit too high and there's got to be that balance that's found. So I'm just interested to understand from your perspective as a lender, what does a good deal look like in it? And I suspect it may well be more than just the numbers on the page as well.

Ryan Etchells: Yeah. So in my mind, I'll go right back to the fundamental problem that trying to be solved there, because I love what you were saying then about the professionalisation. And I think that's been a massive benefit of changes over the past few years. I think landlords have professionalised. I think the dinner party landlord is now becoming less and less prevalent in the market. And I think that's a good thing. But fundamentally what's actually trying to be solved there is that good quality housing needs to be there for the end tenant. The UK has a housing shortage crisis and that's existed now for a long time. I think the government's ambition to build 300,000 houses per year. I think it's been their ambition since I was born in 1986, as far as I can tell. But, and they've never achieved it. And that's the actual problem that needs to be solved. Good quality housing for the end tenant. So what does a good deal look like? 

Well, for us a good deal looks like a landlord and an investor that has a good understanding of what the local market needs in their area for that end tenant. A bad investor for us is someone that has no thought process and regard for what the end tenant needs from that accommodation. We love dealing with investors and landlords that put front of mind, this is the market that I operate in, this is the local market that

Ryan Etchells (19:05.216)

I understand and this is what I know tenants need from housing in that area. If a landlord opens their pitch to us talking about the end tenant and talking about what housing is needed to be provided for tenants in their area, that is a great start to a pitch for us. After that, obviously we're very interested in the value of the property. We're very interested in the scheme, the development, what the investor's ambition is for what the property is going to look and feel like. 

Obviously we're interested in all that, 100%, but we love it when investors open their pitch with, this is what my area needs and this is what the tenants need in my area and I'm going to provide that. Too often again we've seen investors think, build it and they will come. If I build this scheme in this area, well, it doesn't matter. I don't need to do my research because as long as I build what I think is quality, then people will come. That is not the right attitude and that is definitely not with a way of opening up the conversation with us. We're always interested in that local knowledge and what the end tenant needs.

Andy Graham: I think that's a wonderful bit of insight from your side of the deal. And just sort of tip for all of our listeners today, something that I've done for a long time with new mortgage applications, refinance applications is that I've submitted a business plan with it. And that business plan tells the lender and that person who's looking at my application a bit more about me and my business and my objective, my history in CV, but it very much includes what my mission is and why I'm producing, letting to the types of tenants and the types of housing that I am to try and make sure that they fully understand that I have a really good understanding of my market and my business. And I have definitely found that in many cases has really simplified the underwriting process and has really helped get a lot of confidence from lenders about the proposal that I might be making to buy something or do something to a project. So I think listening to you say that and knowing actually that's not just something that anecdotally I found to be useful and sharing to hear you say that. I think is a really useful bit of advice.

Ryan Etchells: And that's what we do when you're talking to a salesperson at Together, ultimately that transaction that we're building with you, we will have to put a proposal into credit committee as to why, especially when it's a larger transaction, when it's the HMOs tend to be a little bit larger. But we are explaining that to our credit committee. We are talking about what the customer's ambition is, what they're trying to achieve. We obviously have to talk about the nuts and bolts of this is the purchase price, this is what the customers putting in, this is what the scheme build looks like, this is what the GDV is going to We obviously do all that, but we open up with exactly what you're describing. What is this customer trying to achieve? What are they ultimately trying to achieve in the longer term? That is what the credit committee are wanting to hear. So whenever a customer helps us do our work for us is obviously a big bonus for us.

Andy Graham: One of the challenges Ryan that I know again, a lot of our investors and in our community often struggle with is trying to predict the outcome of what that end valuation will be. It's a challenge for everybody. But if you're buying a property that needs a scheme of works with a view to then maybe getting a license on it, getting the tenants and getting it up and running, there's a real question mark on what that asset is really worth. And I think it's probably fair to say there's always going to be an element of optimism, I would say, from an investor's side. And I think it's probably fair to say there is an element of pessimism usually taken from the valuers side, or certainly they're looking for any plausible reason why actually there might be a challenge. 

But I'd be interested to hear where Together sit with this and when, whether or not you have any advice to share with our listeners about how to approach trying to determine what the end valuation could be. Because it is, we see questions like this, you're flying around the community all the time. You're trying to establish what do you think a six bed HMO with this sort of rental yield might be worth in this sort of area?

Andy Graham (23:00.396)

And it's a difficult one to answer, but I just wondered whether there's any insight that you could share and even any advice from a lender's perspective about how a community could approach this part of the process.

Ryan Etchells: Yeah. Okay. So the best advice that I can give is, and it's probably going back a little bit to the start is that relationship with your lender is key. So at Together, we have internal value as we will obviously use the external valuation that's been instructed to understand purchase price, to understand overview of the works and form an opinion on, what we think that NGDV will be. Cause you can't, external valuer understand the market. They understand the local knowledge that they operate within. So you'll never get away from that. But we have internal valuers, which have got vast amounts of experience that can then understand that, digest it, and importantly then engage the customer to understand what their plans are, what they think their scheme of work is. 

So I guess the biggest piece of advice that I can give, and it's not my area of expertise, the credit teams sit separate to me, but the biggest piece of advice that I can give is, start that conversation early with your lender, start that engagement and help the lender understand your perspective, your point of view and help the lender understand the vision of what you're trying to achieve. That early engagement with your lender, I think is key because especially with a lender like Together and I don't speak for every lender in the market because we do operate in a market that we can spend the time to do this, but having that engagement and that two way conversation from as early as you can in the process. We'll just reap rewards, not for that transaction, well for that transaction, but more importantly for the long-term relationship. We want investors to succeed in the long-term. We want them to achieve their longer-term ambitions and we'll only do that by having that early engagement.

Andy Graham (24:55.608)

I think to add to that as well, bit of advice and again, just some firsthand experience. When I've been approaching a lender with a scheme that does need a complete refurbishment, maybe reconfiguration, maybe there's going to be quite a bit of change to it. I found that conversation to be much easier if I've given them detailed plans. I've actually been able to demonstrate physically what we're proposing to do. If I've been able to give them quite a thorough breakdown, perhaps not the final final schedule of works, which may take a bit of time to get to with a contractor, but a thorough sort of proposal in terms of the scheme of works that's being planned on that property and to try and really help make sure that the lender and the valuer and everybody involved really understands exactly what's happening. And again, to demonstrate that all of that thought has gone into it, there's reasoning behind the costings and there is a method to actually getting to the end objective and sometimes just a simple pack of information just to supplement an application I found that could be really helpful and avoid lots of back and forth and the risk of things getting lost in translation, which I think is quite easy. Some of these schemes can be quite complicated and there can be a lot going on. So just an extra little bit of advice from me there. 

Let's talk a little bit about the market more broadly speaking, Ryan. You highlighted and touched on some of the real challenges that we've had recently. And Ash, I think we could go right back down to sort of, was it? sort of labor bringing in the sort of the tax changes quite some time ago and the real struggles that have sort of been put on to landlords. And there does still seem to be this narrative, the NIMBY narrative there, landlords are the reason we have a housing crisis. I'm interested to know what you think the next five years in terms of sort of maybe political pressures and we're seeing the government talk more about bill to rent and trying to relax the sort of the strings on the planning system. 

I'm sure this is the sort of thing that you guys are really tuned into, but I do wonder whether or not you think there's anything material likely to come out of lots of the discussions that are happening at the minute and how, and whether or not that will actually have an impact on the property market. Cause a lot of our community members are, depending on what sort of tabloids you read, one day wondering whether there's going to be a crash, the next day wondering whether they should buy, buy, buy.

Andy Graham (27:17.304)

So really interested just to understand what you think might happen with sort of labour at the minute and some of the political pressures that we're seeing and talks that are happening.

Ryan Etchells: Yeah, I mean the most interesting development I think since Labour took over and there's been a lot, obviously the world's very different than it was last summer as they released, but the most interesting development that we are fascinated to see how plays out is this deregulation agenda. Obviously in the financial services space that for us is, you know, things like what does that look like for mortgage lending and the FCA, et cetera.

But more broader than that, this deregulation agenda, let's see how that plays out. You've mentioned planning. You've mentioned some of the pieces of regulation or I mentioned Amelia, some of the regulation that's coming over the past few years. The EPC agenda. That seems to be now back amongst the conversation about minimum EPC ratings by certain dates. It's going to be really interesting to see how that plays out because I actually think that labor have got to the root of what needs to change, it's just whether or not we can deliver the change as quickly as we need to. 

So regulation and compliance can be a massive benefit to helping people understand the rules of the game, deliver an economy that is safe, secure, all the positive sides of it. But I do think that in certain areas we've gone too far over the past five to 10 years. So it's going to be really interesting to see how that plays out because I do genuinely believe they've got to the root of where change needs to be. But how they then deliver that is interesting. And they announced it kind of December last year. I think the first time they started really talking about it. We're now in June. I've not seen much in terms of progress. I'm sure there has been in lower levels, but those big ones planning and

Ryan Etchells (29:18.638)

and regulation around landlords has not really been much movement and it'd be interesting to see how that plays out. Now, the thing that I would say is as much as none of us are immune to the macro and geopolitical events that happen, whether it be in Ukraine, Russia, or whether it be Trump's trade tariffs, none of us are immune to that act. But I do think things are a lot more stable. So if I look back into 2022 with the mini budget, 2023 definitely in the start of 2024. 

During that period, the very British thing that we all did was go this, we'll get through this and we'll adjust and, and we'll adapt to this new economic environment. But things were really tough in that period, especially 2023 house prices spent all the year in the negative territory. Mortgage approvals were at the lowest since 2010 during that period. So looking back at that now, it was a really tough time. 

So when you put the period that we're going through in the first half of 2025, when you put that into context of where we were, I think things are a lot more stable. There is a lot more confidence in the market in terms of the mortgage market, obviously where I play the most swap rates of what mortgage lenders use to price fixed rate mortgages. Effectively for anybody that doesn't know what a swap rate is, a swap is a financial instrument that mortgage lenders buy to hedge their books. But more simplistically than that, when you look at a swap rate, that is effectively the average base rate that the market expects over a period of time. So a two year swap and a five year swap. A two year swap is the average of base rate over two years. A five year is the average of base rate over five years. The two year swap and the five year swap at the moment are pretty much identically priced, which tells us that the market believes that base rate will be pretty consistent over the next two to five years. Now that gives everyone a lot of confidence.

Back in 2023, the swap rates were changing month to month wildly. So I just feel like at the moment, there's a lot more confidence in the UK market. We've just done that trade deal with the US, which whether or not it's a good or bad trade deal, the fact is we've done it. So that again gives the UK economy a lot more confidence. So I definitely feel like heading into the second half of 2025, that word confidence is definitely something that we've had now that we maybe haven't had over the past couple of years and

Ryan Etchells (31:45.676)

We just want to make sure we're there to support those investors that will take advantage of that confidence and will feel the opportunity to invest. We want to make sure we're there to support.

Andy Graham: I think it's great to highlight just how important that feature of confidence actually is as an investor. It's very easy when you're looking at deals and looking at methods of building your portfolio to get really quite focused on the numbers and in some cases chase that number around the country and look for deals that deliver it. And often that doesn't really yield the results that investors want in terms of maybe giving them a supplementary income source, giving them time back because you end up chasing things around the country or investing a long way away.

It can be quite difficult to run and manage that sort of thing where actually the predictability and I think in some cases just saying, but I might not get as much as I was hoping out of this deal because rates are what they are, bill costs are what they are, utility costs are what they are, but it's probably going to work really well, especially over the longterm and it's in a really good area and I'm doing a really good thing and providing really good housing and inflation is probably going to erode that debt over time. 

And I think that more investors need to think a little bit like that and just take a little bit of focus off the numbers because I think it's very difficult. It's a sort of a bit of a tightrope to walk just if you're overly focused on what that kind of net, net, net number is. Deals have changed. The market's changed a little bit, but there are some positives right now. And I completely agree with you, Ryan. And it's nice again to hear a lender talking about the importance of that.

Ryan Etchells: Yeah, I mean, we're quite unique in that, as I said at the start, we've been around for 50 years. We've traded through, well, at least three economic cycles that I know of and I've not been here 50 years, but we've traded through a lot of economic cycles. We've supported customers that, we've got customers that in the HMO space that we did one transaction with in 2000 and think it was 2016, we did one transaction with them in Staley Bridge, quite local to here.

Ryan Etchells (33:47.608)

We've now just completed our hundred million pound lending mark with them and they do a lot of social housing, a lot of HMOs. We've supported customers right from the start and we understand the long-term view of the UK property market. We've been doing this a long time and going right back to the start of conversation, the way we've done that is by having great relationships with our customers, supporting them. And taking that long term view that you just talked about, that long term view is the most important bit. I've worked in other organisations in banks where they build business cases on payback within two and three years. We look at payback over a much longer period here because we believe that the long term value of relationships is the most important thing. 

Andy Graham: I think you had a case study to hand, Ryan, I asked you before we hit record, didn't I, maybe an example of the sort of lending that you guys do. And I know there was an interesting sort of investment project that you worked on recently. Could you give us a little bit of context about that deal? I think it'd be really interesting for our listeners to hear about this.

Ryan Etchells: Yeah. So it actually covers and touches on a lot of the topics that we've discussed during this conversation. Really. This was, it was actually a nurse that started out on maternity wards and she ended up doing quite a lot of great work. Actually took her field abroad into Africa and Malawi and had a real passion about supporting women that were going through childbirth and maybe weren't in the best social experience of the life, maybe they'd come from a background where maybe they didn't have the support that was needed at that critical time in their life. And she was very passionate about it. And like I say, took that worldwide and into some of the poorest countries in the world, really. And then as she was working through a career, she was, that passion of supporting women that were maybe not getting the support they needed was something that was quite dominant in her, in her thoughts.

Ryan Etchells (35:53.134)

As she came towards the end of her career in the NHS, she started to purchase buy-to-let properties to support women and support women from those sorts of backgrounds. And she particularly was focused on the aftercare once these women had been through maternity. So she started out buying buy-to-lets and she was a new landlord at that point. And I think we started working with her when she was on maybe a third or fourth buy-to-let.

And then as we developed that relationship with her and as we were supporting her with the buy to let portfolio, she started getting more and more interested in that HMO and how she could support women coming out of those maternity environments, maybe without a stable place to go back to. And so we worked with her, looked at how to structure a HMO deal, looked at how she could take the experience of what she'd learned in buy to let, take it into how some of her block events are. And now she's got, I think she got four HMOs up in Scotland based around those hospital areas and very specifically focused on how to help women coming out of that maternity ward environment without a safe place to go back to but needing to support the new child. 

And it's just a great example of number one obviously a great social cause fantastic story but then starting out life in buy to let and starting out life learning the ropes in probably a more simple buy to let environment but then working with us as a lender to understand how to then extend that experience into HMOs, how to develop properties to then fundamentally serve that deep social need that she wanted to serve. And, and I think it's just a really great example of how working and forming a relationship with a lender can help you make that leap between probably more standard buy to lets into HMOs. 

And the thing that we're really proud of, like I say, is the actual underlying need that she's trying to serve. And again, something that I talked about earlier, when this customer came to us, she led with that. The thing that we wanted to really support with was what she was trying to deliver for the community, not just I'm building a HMO because I think I can get better yield out of this property. She came to us with the underlying need and what she was trying to achieve, which I think we're really proud of supporting with.

Andy Graham (38:09.442)

What a fantastic example, Ryan. Thank you for sharing that with us. And I can only imagine that deals like that, that there's actually quite a lot of complication to it. You're talking about a particular type of housing for potentially vulnerable adults, then throw babies into the mix there and licensing and, and then that's not an easy one to get your head around. That's actually, we know HMOs are a bit more complicated and then there are different levels to that. And that's a really good example to hear that you guys not only were able to do some lending, but actually relish that opportunity and really helped that investor build their portfolio. think that that's a great story to hear. 

And I'm sure a lot of our listeners today will be quite surprised to hear that from a lender because we don't often get this sort of insight. We often sort of either get the lending or we don't get the lending and we never quite know exactly what's happening behind the scenes. So it's really fascinating to be able to have this conversation with you today, Ryan. It's been an absolute pleasure, Ryan. Just, I'm sure there's so much more that we could continue to talk about, but just to getting this sort of first hand insight into what's happening behind the scenes. I think is so useful, so valuable for me and our listeners. So I really appreciate you taking the time to have that conversation, Ryan.

Ryan Etchells: Thanks Andy and the shameless plug from our side is we've got a massive appetite. As we said at the start, we think this is a massive growth area. So we want to be there to support your investors that are listening to this Andy. So anybody feel free to give us a call and start forming that relationship with us.

Andy Graham: Fantastic. Ryan, thank you again. It's been an absolute pleasure we shared Together and all of your current investors and I'm sure many new investors now. Best of luck this year. And look, think we've all got our fingers crossed for some continued good news from the property market. And look, if there's anything that we can do, Ryan, to just help you keep nudging those rates down at your side, let us know. And of course, keep us up to date. Thanks, Ryan.

Andy Graham (39:59.63)

That's it for today's episode guys. Thank you for tuning in. Hope you found that conversation with Ryan and I helpful. I'm sure you did. Really unique to get that sort of an insight from a lender. Don't forget that if you want to come and find some guidance and support head on over to the HMO community. That's our free group on Facebook. Over 10,000 of us now come and see what's happening and ask your questions. We'll do our very best to answer them for you and give you as much help and support as possible. And of course, if you are serious about leveling things up then just head over to theHMOroadmap.co.uk

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