Holiday Let Commercial Mortgages

Holiday Let Commercial Mortgage Options

Holiday let commercial mortgages are designed for larger or more complex hospitality-style assets that fall outside standard holiday let or buy-to-let criteria. These products are suitable for properties operating as genuine trading businesses or those with planning and occupancy restrictions that prevent residential lending.

Suitable Property Types

Holiday let commercial mortgages are commonly used for:

• Hotels and guest houses
• Apart-hotels, including former hotels converted into serviced holiday apartments
• Groups of cottages
• Smallholdings with holiday let use and occupancy restrictions

These property types are typically not acceptable to residential or buy-to-let lenders due to their scale, use class, or trading dependency.

Experience and Trading Requirements

Prior experience is not always required for holiday let commercial mortgages. Many lenders will consider first-time operators, provided the business model is sound and the property is suitable for the intended use.

However, valuation methodology depends heavily on the availability of trading information:

Where trading accounts are available, lenders may instruct an MV1 going concern valuation, reflecting the value of the property as an operating business.

Where accounts are not available, lending is typically assessed on a vacant possession basis with a 180-day valuation, reflecting a more conservative view of marketability.

Valuation and Lending Approach

Commercial lenders focus on:

• Business sustainability
• Location and demand
• Asset marketability
• Occupancy and planning restrictions

The valuation route directly influences achievable leverage and product availability.