Serviced accommodation mortgage updates
Serviced Accommodation Mortgages
The recent increases in the base rate by the Bank of England and their base rate projections, see Bank of England base rate projections post, has seen lenders increasing their lending rates and several leaving the serviced accommodation mortgages sector altogether. However, lenders are now starting to lower their rates as hopefully the markets start to stabilise.
When considering a serviced accommodation mortgage, it’s currently worth considering that:
- Lenders will only take into consideration the rental income that would be achieved through an AST
- Lenders will not take into consideration the income that could be achieved through serviced accommodation
- Lenders may not lend in some locations
- There are generally better terms if you’re looking to borrow up to 70% LTV
- Several lenders will not consider properties with a floor area of less than 30m2
Depending on the level of separate units in a building it may be worthwhile considering a commercial mortgage as an alternative to a serviced accommodation mortgage.
Source: Andrew Wattsford, Founder and Owner
Information correct on date of publication
Andrew Wattsford is an award winning, independent, commercial finance broker. Through Andrew’s other brands he is able to support serviced accommodation landlords with Start Up Loans and Capital Allowances Tax Relief (external links).
Please visit the ‘Our Brands‘ webpage for information on Business Starts and Tax Reclaims.
