Serviced accommodation and Airbnb finance: how to fund a short-let business
Running a property as serviced accommodation or on Airbnb is a business, and it needs the right finance. This guide explains why a residential mortgage will not do, the specialist and commercial routes, and the rules that shape the lending.
Serviced accommodation, including Airbnb-style short lets run as a business, is funded with specialist holiday-let or commercial finance, not a residential mortgage, because letting a property on short stays breaches ordinary residential terms. Small operations are usually funded on projected letting income like a holiday let, with a deposit of around 25 to 35 percent, while larger portfolios and aparthotel-style operations are funded commercially on the trade. Lenders assess the income the units will generate, occupancy and the operator, and the rules that matter include the London ninety-day rule, planning use and short-let regulation. Whether a facility is regulated depends on personal use, and we refer regulated cases to an FCA-authorised firm. We arrange the finance; we do not lend.
At a glance
- What it fundsShort-let and Airbnb-style businesses
- Not onAn ordinary residential mortgage
- Small operationsSpecialist holiday-let-style finance
- Larger portfoliosCommercial finance on the trade
- Typical depositAround 25 to 35 percent
- RulesNinety-day rule, planning, short-let control
Why a residential mortgage will not do
Serviced accommodation means letting a self-contained property on short stays with some hotel-style service, the model most people know through Airbnb and similar platforms. Run as a business, it is not compatible with an ordinary residential mortgage, which assumes owner-occupation, nor with a standard buy-to-let, which assumes a long tenancy. Letting on short stays breaches those terms, so the property needs specialist or commercial finance that recognises the short-let business. Sector detail is at /asset-classes/serviced-accommodation-finance/.
This is a market between the holiday-let and aparthotel worlds, and it is data-poor at research-house level, though the same extended-stay demand drivers apply as regulation pushes short lets toward professionally operated stock. Most of this lending is commercial and unregulated, and Hospitality Property Finance is not authorised by the FCA. Where a property is also for significant personal use and the lending would be regulated, we refer it to an FCA-authorised firm.
The two routes: specialist and commercial
How serviced accommodation is funded depends on its scale. A single unit or a small operation is usually funded like a holiday let, on the projected letting income, with a specialist lender and a deposit of around 25 to 35 percent. A larger portfolio, or an aparthotel-style operation running many units with real service, is funded commercially on the trade, closer to a hotel, with the loan sized against the going-concern income the operation produces.
| Scale | Route | Assessed on |
|---|---|---|
| Single unit or small | Specialist short-let or holiday-let finance | Projected letting income |
| Several units | Commercial or portfolio finance | Combined trading income |
| Aparthotel-style operation | Commercial trading finance | Going-concern trade |
| Buy and refurbish first | Bridging, then refinance | Value and exit |
What lenders assess and what it costs
A serviced-accommodation lender assesses the income the units will generate, the occupancy the operator can achieve, the location, and the operator's experience running short lets. Because the market is less data-rich than mainstream lettings, a clear, evidenced projection and a track record carry real weight. Deposits are usually around 25 to 35 percent, and pricing is set as a specialist or commercial product, typically above a standard mortgage. All figures vary by lender and trading history and are indicative only.
The single biggest thing that helps a serviced-accommodation case is presenting it as a real business: occupancy data, a credible income projection, a clear operating model and any track record. Lenders in this space are wary of optimistic, platform-driven projections, so evidence that the income is sustainable, and that the operator can deliver the occupancy, is what turns an enquiry into an approval.
The rules that shape the lending
Short lets are increasingly regulated, and the rules feed directly into the finance. In London, the ninety-day rule caps short-term letting of a whole dwelling at ninety nights a year without planning permission. Planning use is a live issue, with some areas requiring a change of use or restricting short lets, and a registration scheme has been developing. On tax, HMRC does receive data from the platforms, so income is visible, and the furnished holiday let tax advantages were abolished from April 2025. None of these are finance figures, but each shapes the income a lender will assess.
- London ninety-day rule caps whole-property short lets without planning permission
- Planning use and change-of-use rules can restrict or require consent for short lets
- Short-let registration and licensing schemes are tightening in parts of the UK
- HMRC receives data from booking platforms, so short-let income is visible
- Regulated where there is significant personal use, then referred to an FCA-authorised firm
How we arrange serviced-accommodation finance
We work out whether the operation is a specialist short-let case or a commercial trading one, match it to the lender whose criteria fit, and size the finance against a credible income projection or the going-concern trade. Where a buy-and-refurbish comes first, we arrange bridging and line up the refinance, as at /guides/bridging-loans-for-hospitality/. Where personal use makes the lending regulated, we refer it to an FCA-authorised firm. We are an arranger, not a lender. See also /guides/holiday-let-mortgage-guide/.
Serviced accommodation and Airbnb finance: how to fund a short-let business: common questions
Can you do Airbnb with a mortgage?
Not on an ordinary residential mortgage, which assumes owner-occupation, and not on a standard buy-to-let, which assumes a long tenancy. Running a property as an Airbnb or serviced-accommodation business needs specialist short-let or commercial finance that recognises short-term letting. Using the wrong mortgage can put the borrower in breach of its terms, so the right product matters.
What is the 90 day rule for Airbnb in the UK?
In London, the ninety-day rule limits short-term letting of a whole dwelling to ninety nights in a calendar year without planning permission. Beyond that, you need planning consent for the change of use. It affects both the income a property can earn and the finance, so it must be factored into any London short-let projection. Other areas apply their own planning and licensing rules.
Do I need a commercial mortgage for serviced accommodation?
It depends on scale. A single unit or small operation is usually funded like a holiday let on projected income with a specialist lender, while a larger portfolio or an aparthotel-style operation is funded commercially on the trade. Either way it is specialist or commercial finance, not a residential mortgage. We assess which route fits and place it accordingly.
What deposit do I need for serviced accommodation finance?
Usually around 25 to 35 percent, depending on the scale, the lender and the strength of the income. Smaller specialist cases sit near the lower end, larger commercial trading operations can need more. Rates are priced as a specialist or commercial product, typically above a standard mortgage. Figures vary by lender and trading history and are indicative only.
Does HMRC know about my Airbnb income?
Yes. HMRC receives data from booking platforms, so short-let income is visible and should be declared. The furnished holiday let tax advantages were also abolished from April 2025, so the tax treatment has changed. This is a matter for current tax advice, but it also matters for finance, because lenders assess declared, evidenced income rather than optimistic gross figures.
What is the 80/20 rule for Airbnb?
It is an informal operating rule of thumb, often cited to mean that most of the bookings or revenue come from a minority of the best-performing listings or periods, rather than a finance or lending rule. Lenders do not use it; they assess a credible, evidenced income projection and the operator's ability to deliver occupancy. Focus on that evidence rather than rules of thumb.
Can I get finance to buy and set up a serviced accommodation property?
Yes. Where a property needs buying and refurbishing before it can be let, a common route is bridging finance to buy and reposition it, then a refinance onto specialist or commercial finance once it is trading, covered at /guides/bridging-loans-for-hospitality/. For a ready-to-let property, specialist short-let or commercial finance funds the purchase directly, sized on the projected income.
Ready to take a deal to market?
Send us the scheme and the numbers and we will come back with a view on fundability and likely terms within one working day.