Mortgage guide
What is the best valuation method for a guest house?
Borrowers usually find that market value 1 (MV1) investment valuations are most generous when valuing profitable guest houses, this way, valuers will consider the commercial value to the business as well as the bricks and mortar valuation of the building.
- Published
- 4 Aug 2026
- Last reviewed
- 4 Aug 2026
- Reading time
- 2 min
What is the best valuation method for a guest house?
Borrowers usually find that market value 1 (MV1) investment valuations are most generous when valuing profitable guest houses, this way, valuers will consider the commercial value to the business as well as the bricks and mortar valuation of the building. Borrowers looking for lending against MV1 valuations on guest houses will usually require experience to meet eligibility for products that offer this, but it is also key to remember the guest house will need available financial accounts showing profit, to expect a satisfactory MV1 valuation on an existing guest house.
Commercial mortgage calculator
Choose owner occupier for a business buying or refinancing premises it trades from, assessed on adjusted net profit before tax from the latest accounts, or investment for property let to tenants, assessed on lease income.
Guest house mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Borrowers | Personal, Ltd co, LLP, Trusts, Offshore Trusts |
| Repayment type | Interest only, repayment |
| Term | Up to 40 years |
| Experience | Not required |
| Valuations available | Market value 1 (MV1) Commercial valuation (going concern), bricks and mortar |
| Locations | England, Wales, Scotland, Northern Ireland |
| Valuation methods on products | Yield based or going concern valuation MV1 (market value 1), VP (vacant possession) and 180-90 day valuations. |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Maximum loan-to-value (LTV): | 70% |
| Interest rate: | 6.37% fixed for 3 years |
| Arrangement fee: | £5,250 | No exit fees |
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Frequently asked questions
How much does a guest house mortgage valuation cost?
A guest house mortgage valuation in the UK generally costs more than a residential valuation, often ranging from £1,500 to £3,500 or more, depending on property size, complexity, and whether a going-concern valuation is required.
Can you get a mortgage for a guest house?
Yes, although a guest house in the UK is usually financed with a commercial mortgage rather than a residential loan. Lenders assess trading performance, the valuation method, how the property is used and affordability, and in our experience loan-to-value limits are usually capped at around 70% to 75%.
Do guest house mortgages require accounts?
Guest house mortgages normally require trading accounts where the property is operating as a going concern. If the guest house is closed or non-trading, specialist lenders may assess affordability using personal income and a vacant possession valuation, typically with more conservative lending terms.
How long does a guest house mortgage take?
A guest house mortgage in the UK usually takes 6 to 10 weeks from application to completion, depending on valuation method, underwriting complexity, and how quickly financial and legal documents are provided.
How much deposit do I need to purchase a guest house?
To purchase a guest house in the UK, most lenders require a deposit of 25% to 30% of the purchase price. This reflects typical loan-to-value limits of 70% to 75%, with the exact deposit depending on trading performance, valuation method, and lender criteria.
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