Hospitality commercial mortgages

Hospitality is the UK commercial mortgage sector where the deal hinges almost entirely on people rather than property. A beautiful country pub freehold trading badly is harder to mortgage than a tired roadside pub trading well. A grand hotel with a first time operator is harder than a modest hotel with an experienced manager. This is the consistent message we give every hospitality client at the first call, and it remains true across every sub sector of the industry.

We arrange hospitality commercial mortgages across the UK, with active panel relationships across the lenders who actually understand the sector. There are perhaps eight to ten UK commercial mortgage lenders who write the bulk of hospitality business in 2026. Outside that group, hospitality cases are often quietly declined irrespective of how good the file is.

The sub markets within hospitality, and how they price

Food led pubs and gastropubs price at the tighter end of hospitality. The food revenue is generally seen as more resilient than wet revenue alone, and the operator skill set required is well understood by underwriters. Established food led pub freeholds with experienced operators print at 7.50% to 8.50% on five year fixed at 60% to 65% LTV.

Wet led pubs, where drink sales are 60% or more of turnover, are still bankable but the lender list is shorter and the pricing is wider. Expect 8.50% to 9.50% on the same five year fixed at 55% to 60% LTV. Some lenders have stopped writing pure wet led pubs entirely.

Hotels, particularly owner managed mid sized hotels, are well served by the lender market. Established trading hotels with consistent occupancy and a clear operator can print at 7.50% to 8.75% at 60% to 70% LTV. Larger hotels and hotel portfolios move into specialist territory.

Independent restaurants are a more variable picture. Strong trading independent restaurant freeholds with experienced operators get done at sensible rates. First time restaurant operators face the widest pricing gap in the hospitality sector, often 100 to 150 bps wider than the established operator on the same building. Many lenders simply will not write first time restaurant operators.

Guest houses, bed and breakfasts and serviced accommodation occupy their own corner of the market. Smaller deal sizes, typically owner operated, often financed through semi commercial routes where the trading element is modest.

Bars and nightclubs are at the harder end of hospitality. Very few lenders write nightclubs at all. Bars price wide and at lower LTVs.

The information pack that gets hospitality cases done

The single biggest predictor of a fast hospitality commercial mortgage is the quality of the information pack at first submission. We always ask hospitality clients for the following before approaching lenders.

Three years full filed accounts of the trading entity, with notes. Two years VAT returns. Current year management accounts and a current year profit projection signed by the accountant. Operator CV setting out relevant experience. EPC. Premises licence including conditions. Any disciplinary or licensing history disclosure. Forward business plan including any planned changes to trading.

Where the file is complete, hospitality commercial mortgage applications can run inside eight to ten weeks from initial broker call to drawdown. Where the information is incomplete or trading is questioned, files can drag for six months or fall over entirely.

A note on operator experience

The most important sentence in any hospitality commercial mortgage submission is the one that describes who is going to run the business. Lenders price first time operators wider because the data shows first time operator hospitality businesses fail at materially higher rates than experienced operator businesses, even on the same property. If you are entering hospitality for the first time, expect to provide a manager or licensee with relevant trading experience as part of the submission, even if you are the sole shareholder. That sentence alone has moved files from declined to offered on multiple occasions.