By the Unity Stays directors, Marcus Chong & Gadir Al-Khatib · Last updated 12 August 2026
In short: Serviced accommodation is usually financed with a specialist holiday-let mortgage that explicitly permits short-term letting; standard buy-to-let terms require a tenancy, so short letting breaches them. Lenders typically want a larger deposit, personal income beyond the property, and assess projected income averaged across seasons — so use a broker who works in this sector and resolve licensing first.
Why standard buy-to-let usually will not do
A buy-to-let mortgage is written around a tenancy. The conditions typically require letting on an assured shorthold tenancy of a minimum term, and short-term or holiday letting is a different use that falls outside them.
This is not a technicality lenders overlook. Listings are public and searchable by address, and the consequences of a breach run from a rate change and a fee through to the loan being treated as repayable.
A residential mortgage is stricter again and almost always prohibits letting outright without consent. Our lender consent guide covers how to ask properly.
What a holiday-let product looks like
A specialist holiday-let mortgage permits short-term letting explicitly. The trade is that criteria are tighter and pricing differs from mainstream buy-to-let.
Lenders in this space commonly want a larger deposit, a minimum personal income independent of the property, and evidence you are not relying entirely on peak-season earnings. Some restrict the number of properties, some restrict flats above commercial premises, and many will not lend on properties in certain licensing regimes without seeing the licence.
The lender pool is smaller than for buy-to-let, which is the practical reason to use a broker who works in this sector rather than a general one.
How lenders assess the income
This is where holiday-let lending differs most from buy-to-let, and where investors are most often surprised.
Buy-to-let is usually assessed on a market rent an agent can evidence in a line. Holiday-let lending is assessed on a projected income that is seasonal, uncertain and harder to verify — so lenders build in more caution, often by taking an average across low, mid and high season rather than a peak figure.
Some will accept a letting agent's projection; some want an AST-equivalent rent as a fallback test, on the basis that they need to know the property is lettable if the short-let plan fails. Understanding which test applies changes what you can borrow considerably.
Ownership structure changes the lending
Personal and company ownership are financed differently, priced differently and assessed differently, and the tax position differs again.
Since the furnished holiday lettings regime was abolished in April 2025, personally held short lets fall within the same finance-cost restriction as ordinary lettings — which removed one of the standing arguments for holding them personally. Our Section 24 guide covers what changed.
That does not make a company automatically better. Moving existing property into one can trigger stamp duty and capital gains charges that take years to recover. It is an accountant's question and it is worth asking before you buy rather than after.
What to have ready before you approach anyone
Brokers and lenders in this sector ask for the same things, and having them assembled shortens the process considerably.
The address and tenure, with the lease if leasehold. The licensing and planning position for that specific address, in writing. A projection that includes the quiet months rather than only the peak. Your own income and existing portfolio. And, if you already operate, statements showing what comparable properties have actually earned.
If any of the permissions are unresolved, resolve them first. A lender that discovers a licensing problem mid-application will not simply pause — it will decline, and the application shows on your record.
General guidance on how lending is structured, not financial advice. Products, criteria and rates change. Speak to a broker who genuinely works in this sector.