Guest house and B&B mortgages
We arrange commercial mortgages for buyers, operators and investors acquiring or refinancing guest houses and bed and breakfasts. This is business lending against a trading guest house, with regulated owner-occupier cases referred to an authorised firm.
Funding guest house
Guest houses and bed and breakfasts are the smaller end of the accommodation market: a handful of letting rooms, often in a characterful or period building, frequently run hands-on by the owner. Many are part-residential, with the owner living on site, which is the single most important distinction for how they are financed and regulated.
When we say guest house mortgage we mean the commercial mortgage, semi-commercial mortgage or refinance used to buy or refinance a guest house or B&B as a trading business. Lenders read it through the trade, the room income, the proportion let commercially against owner-occupied, and the tenure. A guest house run purely as a business is funded as a commercial mortgage on its trade.
Where the property is genuinely the owner's own home with a letting business attached, the lending can fall within the regulated mortgage perimeter. We are an arranger and introducer, and the unregulated, business-purpose side of this market is what we arrange; a regulated owner-occupier case, where the borrower lives in the property, we refer to an authorised firm rather than advise on ourselves.
We present the trade, the commercial proportion and the tenure so the right lender, on the right basis, can price the case, and we run the market across commercial and semi-commercial lenders as an arranger.
What we fund
- Guest houses run wholly as a commercial business
- Bed and breakfasts with a part-residential element
- Semi-commercial guest house and owner-accommodation cases
- Period and characterful properties with letting rooms
- Acquisition of an established trading guest house
- Refinance of a guest house onto better terms
Indicative terms
- Commercial mortgage LTVUp to around 65 to 70% of value
- Going-concern basisSized on the trade and room income
- Term15 to 25 years
- Indicative rateFrom around 7 to 10% per annum
- TenureCommercial, semi-commercial or referred owner-occupier
- Key testsTrade, commercial proportion, tenure, valuation
- RegulationOwner-occupier cases referred to an authorised firm
Indicative only. Terms vary by lender, operator and home and are not an offer of finance.
How we fund guest houses and B&Bs
We fund guest houses on their trade and tenure. For a business-purpose guest house, run wholly or mainly as a commercial letting operation, we arrange a commercial mortgage to around 65 to 70% of value over 15 to 25 years at an indicative 7 to 10% per annum, sized on the room income and trade. Where there is an owner-accommodation element, a semi-commercial mortgage can suit, blending the residential and commercial parts of the property, with the commercial proportion central to how a lender sizes and prices the loan. The valuation is read on the trade and the bricks together. Where the property is genuinely the owner's own home, the case can fall within the regulated mortgage perimeter, and we refer that to an authorised firm rather than advise on it ourselves. Every figure is indicative and never an offer; the terms depend on the trade, the commercial proportion and the tenure.
Lender appetite for guest houses and B&Bs
Guest houses and B&Bs draw appetite from commercial and semi-commercial lenders comfortable with smaller, owner-run trade. Specialist commercial lenders and challenger banks fund business-purpose guest houses on their room income and trade, while semi-commercial lenders handle cases with an owner-accommodation element, weighing the commercial proportion of the property. Lenders look at the trade record, the valuation, the tenure and the proportion let commercially when sizing a loan, typically to around 65 to 70% of value. As an arranger and introducer with no exclusive tie, we match the guest house to the lender most comfortable with its size and structure, and where a case is a regulated owner-occupier matter we refer it to an authorised firm rather than place it ourselves.
The guest house and B&B market
Guest houses sit within the wider UK accommodation market, which is liquid and well supported. Knight Frank and HotStats put regional UK RevPAR at around £98 in Q3 2025 on occupancy of 82.8%, the room demand that smaller operators capture in their local markets. UK hotel investment reached £3.01bn year to date in 2025 per Savills, after a record £6.6bn in 2024 per Christie & Co, with regional price per room at around £129,000 per Knight Frank, context for the values smaller accommodation assets trade at relative to larger hotels. For a buyer, a guest house is acquired as a going concern where it is run as a business, so the trade and the owner's track record drive value, which is what a lender factors into both the loan and the eventual exit. We present that picture so the case is funded on the right basis.
Finance that suits this setting
- Hotel acquisition financeThe core route for buying a trading guest house or B&B on its going-concern trade.
- Hotel refinanceRe-prices debt or releases equity once a guest house trades steadily.
- Hotel refurbishment financeFunds room upgrades and works that lift the trade of a guest house.
- Hotel term loansLong-term debt against the going-concern trade of an established guest house.
Fund a guest house home
A view on fundability within one working day.
What drives a guest house's numbers
A guest house or B&B is a smaller, often owner-run business, so its economics turn on the room income and trade against a modest cost base, and on how much of the property is genuinely let commercially rather than occupied by the owner. Knight Frank and HotStats put regional UK RevPAR at around £98 in Q3 2025 on occupancy of 82.8%, the local room demand a small operator captures. The decisive factors for a lender are the trade record, the proportion of the property let commercially, the valuation read on trade and bricks together, and the tenure, because a property that is partly the owner's home is funded, and regulated, differently from one run purely as a business. We model the room income and the commercial proportion, and where a case is a genuine owner-occupier matter within the regulated perimeter we refer it to an authorised firm rather than place it ourselves.
Indicative guest house leverage and rates
Indicatively we arrange guest house commercial mortgages to around 65 to 70% of value, over 15 to 25 years, at around 7 to 10% per annum, sized on the room income and trade. A business-purpose guest house with a sound trade record earns the keener end; a larger owner-accommodation element points toward a semi-commercial mortgage, where the commercial proportion drives how a lender sizes and prices the loan. The valuation is read on the trade and the bricks together. Where the property is genuinely the owner's own home, the case can fall within the regulated mortgage perimeter, and we refer that to an authorised firm. These are market-typical, indicative figures and never an offer; the terms depend on the trade, the commercial proportion and the tenure, and we run the commercial and semi-commercial market accordingly.
Frequently asked questions
Can you get a mortgage for a guest house?
Yes. A guest house run as a business is funded with a commercial mortgage on its trade, typically to around 65 to 70% of value over 15 to 25 years at an indicative 7 to 10% per annum. Where the owner lives on site there is often an owner-accommodation element, which a semi-commercial mortgage can suit, and a genuine owner-occupier case is referred to an authorised firm.
Is a guest house mortgage regulated?
It depends on the tenure. A guest house run purely as a business is unregulated business lending, which we arrange. Where the property is genuinely the owner's own home with a letting business attached, the case can fall within the regulated mortgage perimeter, and we refer that to an authorised firm rather than advise on it ourselves.
How much can I borrow for a guest house?
Indicatively to around 65 to 70% of value, sized on the room income and trade, so a deposit of 30 to 35% is a realistic working assumption. The exact figure depends on the trade record, the proportion of the property let commercially, the valuation and the tenure. We present the leverage as indicative, not an offer, and run the market to find it.
What is a semi-commercial mortgage for a B&B?
A semi-commercial mortgage funds a property that is part commercial and part residential, such as a B&B where the owner lives on site, blending the two elements. Lenders weigh the commercial proportion when sizing and pricing the loan, and the larger the genuine letting business relative to the owner's accommodation, the more it is treated as commercial trade.
Are guest houses a good investment to finance?
A well-run guest house in a strong local market can be a sound going-concern business, captured by regional UK occupancy of around 82.8% per Knight Frank and HotStats. As with any going concern, the value sits in the trade and the operator, so lenders fund it on the trade record and tenure. We present that picture so the case is sized and priced correctly.
Funding a guest house home?
Tell us about the home and the operator and we will come back with a view on fundability and likely terms.