Bridging finance for serviced accommodation

Why bridging finance suits serviced accommodation in 2025

Bridging finance has stepped from niche to mainstream in the UK, and serviced accommodation operators are among the biggest beneficiaries. As of mid-2025, bridging accounts for over 36% of developer funding, with completions surging into the billions and applications rising sharply. That momentum reflects a simple truth: when opportunities move quickly, funding must move faster. Serviced accommodation, with its dynamic pricing and seasonal demand, rewards those who can complete purchases and conversions in days, not weeks.

Traditional mortgages often struggle to accommodate short-term lettings at acquisition stage. Lenders want to see consistent income, permissions, and a proven operational plan. Bridging fills that gap. It provides short-term capital to secure a property, complete light works, and begin trading. Once occupancy and revenue data are in place, you can refinance to a long-term product, often at higher loan-to-values for proven operators, and sometimes release equity to scale.

A recent coastal case tells the story well. A two-bedroom apartment funded with bridging launched to strong demand, reached 78% occupancy, and later refinanced into a long-term mortgage, releasing £60,000 for the next purchase. Timing matters. Refinancing after peak season - when accounts, bookings, and reviews are strongest - can support a better valuation and lower overall cost of capital.

Speed wins the deal. Performance wins the refinance.

In 2025, higher LTVs up to 75% for both bridging and serviced accommodation mortgages are increasingly achievable for experienced borrowers with robust security and documentation. Legal processes are faster too, with dual representation and tech-led valuations helping compress timelines. For portfolio landlords, SME developers, and first-time SA entrants with a clear plan, bridging can be the catalyst that turns an idea into trading income.

Who will benefit most

Serviced accommodation investors seeking to acquire below market value, convert swiftly, or reposition assets for short-term letting will find bridging particularly useful. It suits those who need funds in days to secure a competitive property, resolve a chain break, or complete works before high season. Landlords transitioning a unit from AST to short-term lets can bridge to establish trading history, then refinance once income is proven. Developers and experienced hosts can use it to restructure portfolios, release equity for the next site, or enter strong regional markets - especially coastal towns, Northern cities, and tourist hotspots where demand can be both seasonal and resilient.

Your funding paths at a glance

1. Bridging loan - short-term capital for purchase, works, or conversion before refinance or sale.

2. Serviced accommodation mortgage - long-term lending tailored to short-term rental income and occupancy.

3. Holiday let or Airbnb mortgage - products assessing trading potential and seasonal income patterns.

4. Commercial mortgage - for mixed-use or multi-unit SA blocks with business income.

5. Equity release via refinance - unlock funds from existing properties to scale SA.

6. Development exit bridging - move from build finance to SA while stabilising income.

Cost, impact, returns and risks

Who is eligible and what lenders look for

Eligibility is broader than many expect, but evidence beats aspiration. Lenders typically assess the property’s location, likely occupancy, achievable daily rates, and your operational plan. Experience helps, yet a first-time operator can still secure funding with strong documentation and a credible management plan. For bridging, lenders focus on the security, the exit route, and your ability to cover interest during the term. For refinancing to an SA mortgage, recent trading accounts, booking data, reviews, and a clear pricing strategy are central.

Higher LTVs - often 65% to 75% - are more accessible when you can prove sustainable income, demonstrate permissions where needed, and show contingency for slower off-peak months. Timing a refinance after peak season is a practical way to present the best version of your business. Kandoo works with a panel of specialist UK lenders who understand short-term rental cash flows, seasonal volatility, and regional nuances. That means a better fit first time, fewer declines, and a pathway from bridging to long-term finance that matches your plan.

From offer to keys - and beyond

1. Outline your goal, budget, and exit strategy.

2. Share documents - IDs, proof of funds, property details.

3. Secure a decision in principle from a lender.

4. Instruct valuation and legal with clear timelines.

5. Complete the bridge and take ownership.

6. Launch operations and track bookings and income.

7. Prepare refinance pack post-peak trading.

8. Switch to long-term SA mortgage and release equity.

The trade-offs in plain sight

Before you commit

Think about the whole journey, not just the purchase. The right bridge lets you move quickly, but the quality of your operations will decide your refinance terms. Build your forecast with seasonality, rate sensitivity, and downtime for maintenance. Confirm any planning, licensing, or lease restrictions early, particularly for flats where building management rules can limit short-term letting. Keep cash buffers for interest and unforeseen works. If your property is in a coastal or tourist-led area, aim to refinance after the strongest trading window so lenders can see the best twelve-week snapshot. Use tech-based pricing tools and professional management where appropriate to strengthen your income story. The more complete your evidence, the more competitive your exit.

Alternatives worth weighing

1. Buy-to-let with consent to let - suitable where short-term letting is limited.

2. Unsecured business loan - faster but smaller amounts and higher cost.

3. Second charge on another property - unlock equity without remortgaging the main asset.

4. Joint venture capital - equity partner funds the deal for a profit share.

5. Development finance - for heavier works beyond a standard SA conversion.

Frequently asked questions

Q: How fast can a bridging loan complete? A: With documents ready and a clear exit, completion can happen in days. Dual representation and desktop valuations can compress timelines further, though complex cases take longer.

Q: What loan-to-value is realistic for SA in 2025? A: Many borrowers see 65%-75% LTV on SA mortgages, with bridging lenders sometimes matching that for experienced operators offering strong security and a credible plan.

Q: When should I refinance from bridging to a mortgage? A: After your best trading period. Refinancing post-peak season allows you to present strong occupancy, ADR, and revenue, which can support higher valuations and sharper pricing.

Q: Do I need prior SA experience? A: Not always. A robust plan, professional management support, and solid documentation can offset limited experience. That said, experience often improves terms and speeds underwriting.

Q: What are the main risks? A: Overpaying for the asset, underestimating running costs, and mistiming the exit. Seasonality, local restrictions, and unexpected works can also affect cash flow and valuations.

Q: Can I release equity at refinance? A: Yes, if the valuation and lender criteria support it. Strong trading performance can enable equity release to fund your next SA purchase or upgrades.

How Kandoo helps you move first

Kandoo is a UK-based retail finance broker with access to specialist lenders across bridging, serviced accommodation mortgages, and commercial finance. We assess your plan, documentation, and timelines, then match you to lenders who value trading data and speed. Our goal is simple - secure the right bridge today and a smoother refinance tomorrow, with clear costs and a defined exit.

Important information

This content is for information only and is not personal advice. Finance is subject to status, affordability, and lender criteria. Property values can fall as well as rise. Fees and interest apply. Always seek professional guidance before committing.

Next steps: request an illustration, prepare documents, and schedule a lender-ready review with Kandoo.