Market & Lender Update With Ellie Broadhurst

The market can feel uncertain when you’re in the middle of it. House prices move in small increments, rents start to soften, lenders shift appetite quietly behind the scenes, and it becomes harder to know whether things are improving or whether that’s just wishful thinking.

In this episode, I sit down with mortgage and finance expert Ellie Broadhurst to unpack what’s really happening in the property market as we head through the first quarter of 2026. 

Ellie works at the sharp end of specialist lending, so this isn’t theory or headline-chasing - it’s a practical look at what she’s seeing from mortgage approvals, refinancing activity, lender behaviour and investor sentiment right now.

🎯 What You’ll Learn

• What recent lender behaviour could tell us about the direction of the market
• How interest rates, inflation, and sentiment are shaping opportunities for HMO investors
• How EPC ratings could unlock better lending terms and why many investors are missing out
• The growing risks around Article 4, planning evidence, and refinancing HMO properties

If you’re buying, refinancing, or planning your next move in the HMO market, this episode will help you understand where things stand now and what to watch closely in the months ahead.

Contact Ellie here, if you’re interested in discussing your HMO mortgage and finance needs.

💻 Resources & Mentions

• Join Andy’s Accelerator Programme: If you’d like my direct input on your current or next project, you can book a complimentary strategy call with me here.
• The HMO Roadmap: Feeling overwhelmed? Access 400+ tools, templates, and lessons to help you start, scale, and systemise your HMO business - all in one place. Join here.
• Facebook Community: Got questions or need support? Come and connect with 10,000+ investors inside The HMO Community here.
• Social: Follow me on Instagram for daily HMO tips, advice, and behind-the-scenes updates here.

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Transcript

[00:00:00] Andy Graham: 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.

[00:00:20] Andy Graham: 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 systemize your very own HMO portfolio now. 

[00:00:40] Andy Graham: Today, I'm joined by our expert when it comes to all things mortgages and finance. Ellie Broadhurst. Now we're gonna get an update on property lettings, property values, what's going on behind the scenes with lenders, interest rates, inflation, and all of that jazz, and what it means for you and I as property investors. Plus Ellie has got some important updates and some words of caution that she wants to share. Let's get into it.

[00:01:06] Andy Graham: Hey guys, it's Andy here. We are gonna be getting back to the podcast in just a moment, but before we do, I wanna 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.

[00:01:22] Andy Graham: 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.

[00:01:37] Andy Graham: 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.

[00:01:52] Andy Graham: 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.

[00:02:16] Andy Graham: Hi Ellie. Welcome back to the show.

[00:02:17] Ellie Broadhurst: Hi, Andy. Good to be back. Thanks for having me again.

[00:02:20] Andy Graham: I think, is it, I think it's our first catch up of 2026.

[00:02:24] Ellie Broadhurst: Yeah, I think it is. Yeah. It's been a crazy beginning of the year.

[00:02:28] Andy Graham: It has, and we're kind of storming towards the end of Q1 already, which is, feels pretty crazy and I feel like there's a lot of stuff to talk about, and I feel like it's the first time in a while that.

[00:02:41] Andy Graham: I feel like we might be able to have quite a positive conversation. I think things have been gradually improving. We've talked about that and we've talked about the data, but it feels like there's been a definite uptick on a number of things today. So I'm quite excited about having this conversation. I mean, before we get there, Ellie, I was doing a little bit of.

[00:02:56] Andy Graham: Research just on house price data on lettings. Just wanted to kind of really bring myself up to speed on exactly where we are. So I think what I'll do, first of all is just share a little bit of that just to paint the scene of the market currently. So. I went back and looked at a few different sources.

[00:03:13] Andy Graham: You never quite know who to look at and no one's, they're very rarely exactly the same. But if you take Right Move house price index, for example, from January average, UK asking prices are up to sort of about 368,000. Up. 2.8% month on month from December apparently sounds a lot to me, but perhaps more importantly.

[00:03:32] Andy Graham: A 0.5% year on year increase. So not quite sure how that's working, but I mean, my interpretation of that is not a huge change. Halifax are reporting a 0.7 month on month increase to January 26th with annual growth year on year of 1%. So I mean, look, if you took a line somewhere in the middle there. The answer or the result rather, is that there isn't a huge amount, there hasn't been a huge amount happening in terms of house price data. And I think the other thing that's important here is that might suggest growth, but then actually we know that inflation has been just bumbling along.

[00:04:08] Ellie Broadhurst: Absolutely.

[00:04:08] Andy Graham: And it's certainly been higher than that. Yeah. I'm gonna talk about that today. But.

[00:04:12] Ellie Broadhurst: Yeah,

[00:04:12] Andy Graham: so real time. I think house prices are actually still, my interpretation is house prices are still actually down year on year.

[00:04:18] Ellie Broadhurst: Yeah. I think you are always gonna get a little bumps up and down and, and December, we had a slow December because we had the budget in November and then everything kind of slowed down towards the end of the year quite quickly. And then we've had a really bright start to the year in January. So I think that's kind of more reflective of there's more people buying houses in January than there is in December, rather than,

[00:04:38] Andy Graham: yeah, the

[00:04:39] Ellie Broadhurst: actual growth.

[00:04:39] Andy Graham: And you're absolutely right. Yeah. We know that this data lags a little bit, so we should take this with a pinch of salt. I would hope that give this a couple of months, that data does start to look a little bit better.

[00:04:48] Andy Graham: I mean, Rick's, they're kind of saying that sentiment is up ever so slightly as well, so not a huge change, but certainly nothing concerning. A question for you, Ellie, just wanted to get an a bit of insight, I suppose, from your perspective in terms of. The amount of business, the number of mortgages being approved at the minute, the sort of activity that you are seeing, do you feel like that what you are seeing kind of fits with those sorts of reports? Are you seeing something different?

[00:05:15] Ellie Broadhurst: Yeah, I think it is. I think Rick last year was very strange because we had the stamp duty change in in April, and then we had the budget towards the end of the year, and I think those two things changed the way that mortgage approvals sort of worked throughout the year and the way that completions worked throughout the year.

[00:05:32] Ellie Broadhurst: So I think comparing year on year, this year to last year is going to be a bit odd because we had a really busy Q1. And then it slowed down towards the summer, and then it picked up again, and then it slowed down again towards the end of the year, more so than I've seen in previous years. So I think it will seem a little bit weird, but this year has started really well.

[00:05:50] Ellie Broadhurst: We've had a really busy January and February. It picked up like almost instantly after New Year. I think everyone's really keen to get started. The end of last year was quite slow, and I think by, by the time we got to the budget. There was only three or four weeks before Christmas, and I think a lot of investors thought, you know what?

[00:06:07] Ellie Broadhurst: I'm just gonna have a chill and come back to this in January. And then, yeah, it's been really busy. We've had loads of like refinance applications, people trying to raise money to buy more properties, which thought was really positive. And then obviously those purchases well. So yeah, it's been good. The approval numbers are up.

[00:06:23] Ellie Broadhurst: Rates came down shore. Brooke reduced their rates quite aggressively in January, so like nearly half a percent off a lot of their rates. And then they've reduced their commercial rates. And I think that's a really positive sign because it means they want more business, they've got the capacity for more business.

[00:06:39] Ellie Broadhurst: And they are like the really, the, the big player within the specialist space. And also they don't. Change their rates very often. So when they do, it's quite significant. Whereas you've got someone like Lambe on the other end of the spectrum that are up and down like a yo-yo, but they reduce their rates quite considerably.

[00:06:56] Ellie Broadhurst: And actually last week there was a few upward pricings, only slightly, we're probably talking North Point naught five, like a, a small amount, but. That to me says they've got enough business in for now. That's like a slight change to try and bring them down the rankings of rate when people are sourcing properties. So sourcing mortgages.

[00:07:17] Andy Graham: Well, I definitely wanna talk to you a little bit more about what lenders are currently doing in the market. Mm-hmm. At the minute based on inflation data, based on interest rates and things like that. But what it sounds like, from what you are saying, you are obviously trekking ahead of the curve house price data.

[00:07:33] Andy Graham: We know it lags. Yeah, you are seeing what's happening. You are at the coal fish right now, so that activity that can report from you, I suspect will probably start to see wash through in the next few months in terms of house price data. Totally. Let's, let's talk about just the lettings market then for a second as well.

[00:07:47] Andy Graham: I'll have another look at this. I suppose anecdotally, I think it probably be fair to say. We can see and hear that people are finding it's taking a little bit longer to fill rooms. Maybe they're not quite getting the top rents that they were before. And I've certainly noticed this in my portfolio as well.

[00:08:03] Andy Graham: So it felt like the lettings market was cooling down for sure. So I looked at some of the data for this and interestingly. For example, you looked at the O S'S private rental index and looked at, I suppose the 12 months to January UK rents were up 3.5% year on year. Now what's really interesting is actually if you look at the December report in December, they were up 4% year on year.

[00:08:27] Andy Graham: So what that's actually telling us is that that heat is definitely coming out to the market. Yeah, there's been a 0.5% drop from December to January. I think that that is definitely something that we're seeing and hearing from the community as well. I think it's something to be mindful of as well. I think we've definitely seen the peak sort of growth of, of rents, that kind of real acceleration we had for a few years.

[00:08:50] Andy Graham: I agree. The heat definitely, definitely come outta the market a little bit. Now, again, depending on where you get your data from, these results vary a little bit. But generally speaking, the lettings market has cooled a bit and I think everyone listening with rooms that might be coming up fulfilling soon, just need to pay attention to that because it can be really, really sensitive if you're not keeping an eye on that.

[00:09:12] Andy Graham: Just because you've got the top rent last time. Yeah. Or just 'cause you filled it in a week last time doesn't mean that that's gonna happen this time. So just be aware.

[00:09:20] Ellie Broadhurst: Totally.

[00:09:20] Andy Graham: Any evidence, I suppose from your side, Ellie, obviously when values are coming to look, are they paying attention to any of this?

[00:09:26] Andy Graham: Has it done enough to actually cause any real issues when people have been coming to either refinance or or finance something? Any thoughts on that?

[00:09:34] Ellie Broadhurst: It doesn't really make that much difference 'cause I think there's a belief with a lot of investors that if they've got a run filled, like a property filled with all those top end rental figures, particularly if it's a brand new conversion, then.

[00:09:48] Ellie Broadhurst: The value is going to use those rental figures, which it doesn't normally happen like that. The value will use market rent. So in which case I don't think it's really, I'm not seeing it make a difference because we'll always work off market rent, and that's what I've used in my calculations to kind of give clients an estimate of where we're heading.

[00:10:05] Ellie Broadhurst: So, no, I, I don't think it does. The only thing that is causing a slight issue is that lenders like to have the properties filled on completion. Unless you've got a sort of big enough court failure that you can absorb any. Gaps that you've got there. So what I normally say to people is, let's have the property valued as soon as the works are finished.

[00:10:24] Ellie Broadhurst: If it's a new conversion. And then in the time between having evaluation carried out and completion, that's when you want to fill your rooms, and that process is taking a bit longer than we would normally see. So that's the thing I suppose to be careful of you. Just like you say, you need to be organized with it.

[00:10:40] Ellie Broadhurst: Also, can you get some drawings done? Can you get some mockups? Can you use other properties that you've got that look in a similar condition and try and advertise those rooms? Prior to the house being ready, just really being on the front foot. I think it's more important than ever.

[00:10:57] Andy Graham: Yeah, I think that that is really good advice actually.

[00:11:00] Andy Graham: And it's also worth remembering that. When we're seeing this sort of data and we're hearing these sorts of things, there can be almost a compounding effect to it. 'cause if a few people start to struggle with rent in a location, then actually very quickly tenants can see that and they start shopping around.

[00:11:16] Andy Graham: They feel like they can negotiate, they can push things a little bit. Yeah, they feel less urgency to move perhaps because there's more opportunity in the market. There's more rooms available. So something to be aware of because on a regional level this can be quite different as well. Yeah, I think some areas are still incredibly buoyant.

[00:11:30] Andy Graham: Probably able to still push your rents, but I think in, in some areas this is more of a problem than others. Yeah, and just remember guys, that this data, this is average data, you know, it's not necessarily where you are or what, where your properties are. It could be better, it could be slightly worse. So just be mindful of that.

[00:11:48] Ellie Broadhurst: I think also like longer term, just if thinking if you. Where we've had the last couple of years, investors thinking that they can really push the number of bedrooms that they've got and really kind of go to those minimum room sizes, perhaps take away an en suite or two, just really pushing the number of rooms that they can put into a property.

[00:12:06] Ellie Broadhurst: Actually, if you've got more tenants in smaller properties, you are more likely to get turnover of those tenants. So. I think longer term, if we think if this is how we're going to be now for the next however many years, if you're doing conversions now, I personally would do larger rooms and less of them because I think if you've got less turnover of tenants, you will have less problems long term.

[00:12:31] Andy Graham: Yeah, I completely agree, and I think on the backdrop of the new legislation coming in and how clear it is. To us as landlords now that we should be much more focused on making sure our tenants are happy and stay and pay. I think that that is more important than ever. We know that people who value their accommodation are much less likely to stay.

[00:12:55] Andy Graham: If there is a reason or we give them a reason to move, then there's a good chance that. The smallest thing might just push them to actually make that decision to move. And then ultimately it comes at a cost to us. But more generous rooms, better amenities, not squeezing everything outta the property. I think that.

[00:13:11] Andy Graham: It's more important now than ever to look beyond the spreadsheet, which is remember, yeah. The interpretation of what that deal looks like today, and think more about the 10, 15, 20 year lifecycle of that property. And I do agree with you. I think better amenities and focusing on that more than we perhaps have had to in recent years is definitely something we should be doing.

[00:13:32] Ellie Broadhurst: I agree.

[00:13:33] Andy Graham: Let's talk about interest rates then.

[00:13:35] Ellie Broadhurst: Mm-hmm.

[00:13:35] Andy Graham: So, February's NPC meeting. Obviously it was a pretty tight vote. The, you know, the held rates are 3.75. Um, it was a five to four vote. But give us your sort of breakdown of this, Ellie, what does it mean? What do you think it looks like for the next meeting and how has the market reacted?

[00:13:53] Ellie Broadhurst: So the market kind of reacted before. Like previously before we had the reduction down to 3.75, and then I don't think we've seen any kind of market led reduction. When I speak to lenders about where they have had rate reductions, it's been more around wanting more business through the door and having access to cheaper funding from more mainstream banks, things like that.

[00:14:15] Ellie Broadhurst: So I don't think we've really seen it as yet. There's been a little bit of a bubble up and down, but you always get that bubble up and down based on volumes and how much business people want. So I don't think we've really seen it, and I don't think that we're quite, you know, the next meeting will be in March, so I don't think we've seen kind of the pricing coming into an assumption that the rate has got is gonna go down, for example.

[00:14:38] Ellie Broadhurst: I don't think we've seen that yet. Prior to this month's meeting, there wasn't really much talk about another rate reduction until sort of May, June time, but then it has been really close, as you say, five votes to four. So it'll be interesting to see what happens in March. I think the general feeling is that we won't see another rate reduction.

[00:14:59] Ellie Broadhurst: But having said that, since this meeting we've had inflation figures come down. They come down to 3%. Growth is still not doing a great deal. Unemployment is still up. So we do need to do something like, well, the government need to do something to try and ease things, to try and encourage spending. That's what we've got to do.

[00:15:17] Ellie Broadhurst: And the, the easiest way obviously to do that is to reduce rates. So I think it'll be interesting to see. It would be great to see another rate reduction, I think from an economic point of view, as well as obviously mortgage rate point of view. But yeah, we'll see.

[00:15:29] Andy Graham: Definitely. I think seeing rates come down to the mid threes would feel like we're very much sort of on the way back to a better and more tenable lending environment.

[00:15:38] Andy Graham: And I'm gonna stick my neck out and I'm gonna say I'd be shocked based on the data that's come out yet in the last couple of weeks if we didn't see a reduction at the next. Next meeting. So I'm all in. I'm putting my chips on the table.

[00:15:52] Ellie Broadhurst: Well, only one person needs to change their mind, don't they? And then we've got a split light the other way.

[00:15:56] Ellie Broadhurst: I mean, yeah, it would be great. You know me, I'm a bit cautious of these things. We'll wait and see what happens. But yeah, I think it would be great. I think from the thing is, as always, with these things, we talk ourselves into. Good things and we talk ourselves into bad things, don't we, in terms of like growth or recession, all these sorts of things.

[00:16:11] Ellie Broadhurst: If we can talk ourselves into some economic growth, I think that would be brilliant. And a three and a half percent base rate. Brilliant. We haven't seen that in years. And then also, yeah, it just sounds more positive, doesn't it? It just, everything sounds more positive. AIPs, I think are up, you know, it's been a really busy.

[00:16:29] Ellie Broadhurst: First couple of months for everyone that I've spoken to, every lender that I've spoken to. So if we can try and keep on that trajectory, that would be great. And I think investors would be far more likely to purchase new properties. If you can see that the base rate is sitting at three and a half, so yeah,

[00:16:45] Andy Graham: Yeah. Well it sounds like you are saying all the right stuff. You are seeing all the right stuff. I think the data that's come out recently is all pointing in the right direction, and I agree completely. Sentiment is so much about what actually happens. The tangible stuff that we see in the market, the fact that people don't go out and buy, they stop spending, they stop investing.

[00:17:03] Andy Graham: Yeah. So I'm feeling positive, but I do wanna say to our listeners that if you've been sitting on the fence. Waiting for this to happen. Waiting for things to start looking more positive. Just remember what that means is the best buying opportunities might be getting stuff they might be behind us. As things start to improve, there's a bit more scope in the market.

[00:17:23] Andy Graham: There's more lending available. Appetite is stronger, better. There's gonna be more competition for deals as people come back into the market. Yeah, and I do think if we look back a few years, there hasn't been much positive sentiment about property for quite some time now, and it feels like we are definitely due almost a bit of a revival of the opinion of property.

[00:17:43] Ellie Broadhurst: Although it's interesting because on the face of it, we have had no problems with valuations. I know we have this whole discussion. Don't worry about down valuations. I hate the word down valuations. It is 99% of the time a mismatch between the client's exploitations and how a value is valued in the property there.

[00:18:02] Ellie Broadhurst: That's where that disparity comes from. But from what I've seen, we haven't had a problem, but the whole of last year, I could probably name you, I dunno, two or three evaluations that we had that came in way off what the client was expecting. And yes, I know. I mean, we do a lot of work with clients. Around what to expect.

[00:18:20] Ellie Broadhurst: So we are not just putting random numbers in and hoping for the best. We do a lot of work on that. But yeah, I'm not seeing commentary around from valuers saying that things are looking terrible. It's just not happening. But it's a strange thing. But if you look about, so the statistics you were saying earlier on about asking prices, asking prices in December were 10,000 less than they were in January.

[00:18:43] Ellie Broadhurst: Give or take.

[00:18:44] Andy Graham: Mm-hmm.

[00:18:44] Ellie Broadhurst: So actually December was a better time to purchase a property than it was in January.

[00:18:48] Andy Graham: Mm-hmm. It often is. Yeah. It often is. Okay. Well, I think my read into all of this is quite positive and I, I'm usually pretty reserved about this stuff, but I'm gonna stick my neck out and say that 3.5% is on for the next NPC meeting.

[00:19:04] Ellie Broadhurst: It's coming. It's definitely coming. Whether it will be this next meeting or the meeting after that. But yeah, I would agree it's on its way.

[00:19:10] Andy Graham: I think we're gonna see an uptick in, in the house price activity over subsequent months. I think that that'll take the first half of the year to really wash through and see anything meaningful.

[00:19:19] Andy Graham: But yeah, I'm feeling much more positive. So just to clarify then, Ellie lenders haven't done much, even if lenders were thinking the same? They haven't done much yet. We haven't seen anybody really kind of change rates, do anything material that would actually help us as investors?

[00:19:35] Ellie Broadhurst: Well, Shawbrook, as I say, their rates came down significantly in January, which is a really, really positive move.

[00:19:41] Ellie Broadhurst: But yeah, nobody else has, and actually their competitors haven't followed suit yet, so we'll wait and see. Whether they,

[00:19:47] Andy Graham: were they more expensive than their competitors anyway? Sure. But tend to be a bit more pricey. Right.

[00:19:51] Ellie Broadhurst: It depends on what you are comparing them to. I mean, I would compare them to other lenders like Capture, trust and Castle Trust.

[00:19:58] Andy Graham: Mm-hmm.

[00:19:58] Ellie Broadhurst: Kent Reliance have always been a little bit of anomaly. They are cheaper.

[00:20:02] Andy Graham: Mm-hmm.

[00:20:02] Ellie Broadhurst: But lenders that will allow you to choose your valuer, who will allow you an investment value on a five or six bed HMO, who are in that market, they are generally. There or thereabouts. And if you start comparing them to more high street lenders, you know, T MWs and things, then absolutely they're more expensive.

[00:20:20] Ellie Broadhurst: But it's a completely different proposition. So I don't, it's like comparing apples and oranges doesn't really work. But yeah, they are. Lower Castle Trust have actually got some lower rates at 65 and 70%. They've got some special edition products, but you've got rates in the fives at 75% with ShawBrook and Castle Trust, so, okay. That's really positive.

[00:20:40] Andy Graham: Great. Okay. Well. Let's move on from. Interest rates. We've touched on inflation. I don't think we need to labor on it, but the inflation data was better, perhaps than expected as well. Yeah. So that trend seems to be moving in the right direction. Yeah, which is great news and supports everything that we're saying.

[00:20:55] Andy Graham: Now. Let's have a chat about some of the other stuff that's kind of just washing around now, and I think that some of the news. Has probably brought this back to our attention. So let's just for a second, Ellie, just touch on EPCs and the incentives, I suppose, from lenders, because we know that the government just moved the goalposts again, it's now I think 2030.

[00:21:16] Andy Graham: We've gotta achieve these certain standards. But I know that this is quite a focus for some lenders and certainly there are some incentives if we are hitting those Cs. So just tell us a little bit more about that and how important is it for us to be thinking about this right now?

[00:21:29] Ellie Broadhurst: Well, I think the big thing is just taking advantage of what you've got because what I've seen more recently is now, like you said, the government have moved the goalpost, and I think a lot of investors think, oh, well I can't be bothered.

[00:21:38] Ellie Broadhurst: I don't need to. I've got a valid one or a D or an E. I don't need a new EPC. But then you end up missing out on potentially lower rates or lower arrangement fees because of it. So I think. It is important that investors are looking at it for a few reasons. So we've got a really good like refurbishment bridge product with a lender that will hugely reduce their interest rate if you are able to increase the EPC rating by 20 points and bring it up to a city.

[00:22:05] Ellie Broadhurst: So that's during the refurbishment. So that's a real push. I mean, you can get rates of just over 8% on a bridge. If you do that, which is really, really cheap.

[00:22:14] Andy Graham: So Sorry. Bridge lenders doing the sensei.

[00:22:16] Yeah.

[00:22:17] Andy Graham: Yeah. How, why are they, why are they even bothered? Maybe they're just very green minded.

[00:22:21] Ellie Broadhurst: They are very green minded.

[00:22:22] Ellie Broadhurst: Yes.

[00:22:23] Andy Graham: Okay.

[00:22:23] Ellie Broadhurst: Without naming names. It is a, is a company that you'll have heard of for, not for bridging purposes, but yeah, they are very green minded. They've got fingers in lots of different pies and yeah, they're all very green minded. So, yeah, they're incentivizing you. So yeah, if you can bring the rate down to 8.4, I think it is, on a bridge, which is amazing.

[00:22:41] Ellie Broadhurst: So that's a good incentive right at the beginning. And then in terms of like term mortgages, ShawBrook will reduce your arrangement fee. By quite considerable amount with an A, less so for a B and a C, but still it's a discount. The arrangement fee is added to your loan and you are paying that for the whole time that you have that property.

[00:23:00] Ellie Broadhurst: It's not just for your five year fixed or your two year fix that you're taking out now. That's being added on forever. So if you can reduce that, if. It's great, you know, that saving over the lifetime of owning that property. And then there are other lenders that have got reduced interest rates as well.

[00:23:14] Ellie Broadhurst: So I think it does need to be a focus. It's relatively simple with a lot of properties to get them to a C If you, you're not doing a, an extensive refurbishment. You've got a new build A's and B's are kind of out of your, who reach a lot of the time. But all you need to do is, is hit that C and then you are eligible for.

[00:23:32] Ellie Broadhurst: Some good, good product. So I think it's something that just to be mindful of, keep it in the forefront of your mind.

[00:23:38] Andy Graham: Yeah. I think a lot of people, a lot of members in our community are not even going and getting an EPC done once they've done their refurb. Exactly that. Yeah. They're just, they're doing the work.

[00:23:47] Andy Graham: They're probably gonna qualify for a C. At least, but just forgetting to send someone back in to do an EPC, it doesn't cost much.

[00:23:54] Ellie Broadhurst: Yeah, I had exactly that the other day. Yeah. Clients own this property for five years. He did the refurbishment five years ago. Has got an EPC of an E. He's never bothered to get a new one.

[00:24:03] Ellie Broadhurst: I'm sure he would get a C if he did, because he's done a lot of work on this property. But yeah, missing out and he's going on a product that would give him a discount had he got that EPC. So I've spoken to him about it and he's gonna get that sorted. So it's just thinking about it. Yeah. Keeping at the forefront of your mind.

[00:24:18] Andy Graham: I'm not gonna get in my soapbox today about this, but it does drive me mad. I've got blocks of flats, new homes, and all electric. Yeah. And it's so hard to get a C, like nobody understands so hard, how difficult it is to get a C at the minute. I think they are gonna change it, and we're gonna get. In the near future, penalized for gas boilers and probably better weighting towards electric sources.

[00:24:39] Ellie Broadhurst: That's the problem, isn't it? Electric boilers are more expensive to run, and EPCs were never designed as a green label. They were designed to know how much it was gonna cost you to heat your home. To run the property. Yeah, so they're a bit mismatched. A couple of years ago it was at an event and there was a lady there who works for.

[00:24:59] Ellie Broadhurst: Something to do with EPCs and she was talking about, well, they're sort of recreating something. So it's moving towards net zero.

[00:25:06] Andy Graham: Yes.

[00:25:06] Ellie Broadhurst: And I think, we'll,

[00:25:07] Andy Graham: it's in, see that in time, it's in the pipeline. There's changed. Yeah.

[00:25:09] Ellie Broadhurst: Yeah.

[00:25:09] Andy Graham: It doesn't look good for boilers though. That's the one thing I would say. So,

[00:25:12] Ellie Broadhurst: yeah.

[00:25:13] Andy Graham: Right Now, anyone listening who's buying a pretty standard construction property with gas central heating. It shouldn't be too difficult to get to a C at all. Maybe a bit more difficult than some of the very big properties, the big old Victorian homes and things like that. But generally speaking, a sea should be pretty doable for most of us without having to spend that much.

[00:25:31] Andy Graham: But yet the direction of travel is just so everyone's aware. The scoring system will change and it will be harder for gas, centrally heated properties to achieve the same scores. It will be a bit easier for all electric 'cause obviously that push to go green. It's kind of working its way through.

[00:25:47] Ellie Broadhurst: It does Yeah. I mean, it doesn't really make sense because yes, it is a cost thing, but you can have a hundred percent renewable electricity quite easily. By choosing the right provider on your home, whereas gas obviously can never be renewable, can it? So, yeah, it, it makes sense and I think it, it will catch up in time, but it's difficult if you are trying to tick a box now for something.

[00:26:10] Ellie Broadhurst: Yeah.

[00:26:10] Andy Graham: It's so difficult and I think we've seen the goalposts move so many times already, and I've been quite vocal about this. If someone's gonna have to spend a lot of money to get to a certain target, is it worthwhile doing? Hmm. It's not arguably, well, it hasn't been worth doing so far. It's gonna happen and I think that this is great advice to be sharing on the show, but if it's easy to do, please make sure you are doing it, guys listening in.

[00:26:33] Andy Graham: And if you do need to spend a few quid, then really, I think you just have to weigh up your position, think about what the investment's gonna cost you, how long you plan to hold this property for. If it's a 10, 15, 20 year investment, then it's almost certainly gonna make sense for you to make some investments that, yeah, that give you that better sort of energy efficiency.

[00:26:50] Andy Graham: Okay. So it's a weird one that we're talking about EPCs from a lender's perspective, I find it funny that they're so bothered about this. I really can't understand. Maybe it's just a nice way to get more lending on their books and kind

[00:27:01] Ellie Broadhurst: of, I think it is, and I think it's part of like an overall strategy to try and make sure that the mortgages that they have on their books, when this, if this ever changes Mm, is moving towards that, it kind of takes out a problem.

[00:27:14] Ellie Broadhurst: But I think. I'm not sitting here saying everyone should be striving for an A on their own properties when they're doing their refurbishment. All I'm saying is just be mindful of it. Like if you are doing the works anyway, engage with an EPC officer. Find out what you need to do. Yeah. Like you say, a lot of it is stuff that you'll be doing anyway.

[00:27:30] Ellie Broadhurst: It's is change Your windows is insulating. It's LED lights. It isn't it really? If you do those three things, then you are gonna up your rating quite considerably and just make sure that if you are doing the works to it, don't sit there with a knee just because it's legal and it's fine. Try and get a C and get a discount because why not?

[00:27:47] Andy Graham: I like to remind people as well that you can go and do an online course to become an EPC assessor if you like.

[00:27:52] Ellie Broadhurst: I've got a client who's done that,

[00:27:56] Andy Graham: so if anyone listening today is gonna go and do that and feels like scoring generously, then put me to the top of your list. Okay, cool. So that's EPCs. Now, Ellie, I know that there was something that you did wanna talk about today.

[00:28:07] Ellie Broadhurst: Yes,

[00:28:07] Andy Graham: very briefly. That has concerned you a little bit, and it's around the Article four stuff. So

[00:28:11] Ellie Broadhurst: yeah,

[00:28:11] Andy Graham: just. Tell us what's going on.

[00:28:14] Ellie Broadhurst: Article four has been driving me a bit crazy, I would say all of last year. It's just become a problem and I don't know whether it's become a problem because more people are now buying properties that were already HMOs in Article four areas because I know you've got a lot of mentors and like property.

[00:28:32] Ellie Broadhurst: Education places that are trying to encourage people to go to Article four. I think there's a lot of misconception around, you know, you are more likely to get, well, maybe not quite misconception, but you are more likely to get an investment value in those places. There's a lot of cities now where it's more tricky to get planning, so therefore it's a safer way to invest in those areas.

[00:28:52] Ellie Broadhurst: But what's frustrating about Article four is that no situation seems to be the same, and no lender seems to deal with it in the same way. So I've had examples where clients have refinanced a good example in Brighton, so it's been Article four for over what about 13, 14 years in Brighton. Clients owned this property since the nineties.

[00:29:12] Ellie Broadhurst: He had all the evidence. He's never got certificate bill of development. But we had enough evidence that we could provide to the solicitor. The solicitor was comfortable. We got it through no problems, no indemnity insurance, no certificate bill of development. Absolutely fine. And then I've had other examples, one recently where a client's trying to buy a property in Article four in Bath.

[00:29:31] Ellie Broadhurst: So again, somewhere where it's more tricky to get planning in, in the center of the city. And the lender said no, because there's not enough evidence to suggest that it has been used for a period of time. So it's just very difficult for me to say. Yes, that will be fine. Or no, that won't be fine because I genuinely don't know.

[00:29:52] Ellie Broadhurst: And I mean, planning has always been something that's kind of outside of the mortgage process like that is dealt with by solicitors.

[00:29:58] Andy Graham: Mm-hmm.

[00:29:59] Ellie Broadhurst: I can obviously guide clients. I can say, if it's a definite no, I'm more than happy to speak to solicitor about things, and I do regularly to find out what their take will be.

[00:30:08] Ellie Broadhurst: But it's really tricky and I think that, yeah, investors just need to be really mindful of what they're going in for. And I think the big thing for me is. Around understanding if you are buying a property for a price, a priced as an HMO, so potentially an investment value, but it's not got the right planning, should you be paying that money for that property because in effect, it is a house, isn't it?

[00:30:34] Ellie Broadhurst: It's not an investment. Um, it hasn't got the right planning usage, and that's where things just become a bit more difficult.

[00:30:41] Andy Graham: I'm not gonna sugarcoat it. I think anybody who is trying to buy something that doesn't have the sufficient evidence, I think it's just lack of complacency. I think it's just, we all know that without the evidence, it may.

[00:30:56] Andy Graham: Come into question. Yeah. And of course the first person who's gonna question that, and I think the assumption is sometimes that, well, what's the likelihood that I'll get a planning enforcement? But it doesn't matter. It'll be a lender either. Yeah. When you buy it, or a lender when you come to refinance it.

[00:31:10] Andy Graham: And if that solicitor working on behalf for the lender ask you for the evidence and you are not able to provide it, it's gonna be a very big problem. So my opinion is that this is really black and white. We know what evidence we need. Ideally we need every single tenancy agreement or a certificate of lawful development.

[00:31:25] Andy Graham: And if we haven't got any of that, then we have to make sure that we are able to explain any years where there's missing data. Perhaps it was a year where it was out of cycle, it was being refurbished, whatever it might be. But I don't think we can cook corners with this stuff. And I think anyone who does really is kind of skating on ice.

[00:31:42] Andy Graham: Yeah. Really. 'cause I think that it is just a matter of time before someone sort of says, hang on a minute, where's your evidence?

[00:31:49] Ellie Broadhurst: There's two things I suppose, because there's one is a lot of people don't want to put in the application for this difficult of lawful development because while you haven't got anything outstanding, you could potentially use indemnity insurance or you can just prove it.

[00:32:01] Ellie Broadhurst: You know, you can just show that. If you put an application in and they say no, then you then can't use properties in HMOs. It's then illegal, so I can understand why people don't want to put that application in. But then the flip side, if you haven't got. The correct planning, you know, in writing saying you're allowed to use it as an HMO every time you refinance or if you ever wanted to sell it.

[00:32:21] Ellie Broadhurst: You are relying on a solicitor, probably a different solicitor to the ones that you've used before, being happy with the evidence that you've provided. And it only takes for one person to say, actually, no, I'm not happy with that. And the whole thing falls apart. So the safest thing is to have that CLD.

[00:32:35] Ellie Broadhurst: That is the foolproof method. And I suppose I would encourage everyone who's particularly purchasing a property. To have that in place before you purchase it, because there was always gonna be a risk if you don't.

[00:32:47] Andy Graham: Hmm. My opinion is a little bit different. I think in an ideal world we would have it, but.

[00:32:52] Andy Graham: Often with the competitive nature of buying these sorts of properties, sometimes we have to just be prepared to move a bit more quickly. Totally, yeah. And take a position on that risk. Now, my position has always been like, if I've got the evidence, I can see that this has been physically used continuously as A HMO, then I can take that evidence at some point and I can go and get my certificate of lawful development.

[00:33:11] Andy Graham: Mm-hmm. But I don't necessarily need it today, and I can demonstrate that to solicit whomever it is theoretically compliant by virtue of. Having that evidence, you've got those grandfathered rights, but it is still a risk. I have worked with solicitors before who don't get it, and that's not completely unreasonable because it is quite a specialist field planning.

[00:33:30] Andy Graham: Yeah. So, and their job is to report back to the lender and just one email with a couple of lines.

[00:33:35] Ellie Broadhurst: Yeah.

[00:33:35] Andy Graham: It's a problem.

[00:33:36] Ellie Broadhurst: But they're reported to the lender. They're not acting for you. Correct. And they're not saying, well, you know, it'll probably be okay. That's not enough, is it? So, yeah. Where I've seen it be a problem is where the solicitors have said that I don't.

[00:33:47] Ellie Broadhurst: Feel that this is enough information. Mm-hmm. And like you say, when you have had gaps, like if you've had a refurbishment outta cycle, whatever, it's, that then adds more uncertainty to whether you would in fact get that certificate of lawful development. So yeah, it's a tricky one, but I think you just need to go in with your eyes wide open.

[00:34:06] Ellie Broadhurst: And just, the big thing to remember is that just because a property's had a license for God knows how long does not mean that it's got the correct planning.

[00:34:14] Andy Graham: No, it doesn't. A great reminder and yep. So make sure guys, you've got your evidence. A HMO license is not evidence, and if you choose to purchase a property without those documents at hand, then it's buy everywhere and it might come back and bite you later on.

[00:34:29] Andy Graham: Ellie, I think that my summary, my takeaway today is that things are looking positive. I'm feeling quite good about 2026. I think as a buyer, as an investor, this is a good opportunity to continue to find good deals, to feel a bit more. Confident about the market. I think things are, are definitely a bit more predictable at the minute.

[00:34:46] Andy Graham: Obviously, we can't have contingencies from black swan events that may or may not happen around the world, and that still seems to be an ongoing struggle, but

[00:34:54] Ellie Broadhurst: absolutely,

[00:34:54] Andy Graham: based on the sales and lettings data, based on the, so I suppose last MPC meeting based on inflation, based on your anecdotal evidence, it's all feeling a little bit more positive.

[00:35:06] Ellie Broadhurst: It definitely is. It definitely is

[00:35:08] Andy Graham: That is a great, great way to be going into Q2, 2026.

[00:35:11] Ellie Broadhurst: I agree. I think there are plenty of opportunities out there, and especially now, I think it works both ways, isn't it? Because if people considering selling their house think that things might go quickly and they might get a good sale price, then they're more likely to put the house on the market so that, yeah, the whole thing will snowball, hopefully.

[00:35:27] Ellie Broadhurst: We'll have a good year.

[00:35:28] Andy Graham: Well, this has been quite a refreshing conversation 'cause it feels like it's been quite a while since we've kind of been able to finish on that. No. So for everybody listening today, if you are buying HMO, if you are refinancing a HMO, head over to theHMOroadmap.co.uk. There's a section for specialist mortgages and finance and you can leave an inquiry with Ellie.

[00:35:47] Andy Graham: Ellie, you'll be happy to have a conversation with you and sort out whatever your lending requirements are. But Ellie. It's been an absolute pleasure. As always, thank you for sharing your insights, all of your advice and knowledge with us.

[00:35:58] Ellie Broadhurst: Thanks, Andy.

[00:35:59] Andy Graham: Thanks Ellie.

[00:36:06] Andy Graham: That's it for today's episode. Guys. Thank you for tuning in. Big thank you to Ellie as always for joining me on the show and sharing her insights and wisdom. Now, if you are building your HMO property business, but you wanna level things up, head to thehmoroadmap.co.uk. Right now. Now you'll find some masterclasses in there along with about 400 other resources and tools.

[00:36:25] Andy Graham: But some of those masterclasses are by Ellie. So for example, if you wanna find out how to master commercial valuations and get more back outta your deals, then that masterclass is there and waiting for you, plus a whole lot more. That's it guys. Thank you for tuning in again, and don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO Podcast.