In 2025, multi-unit serviced apartments have emerged as one of the fastest-growing segments in the UK property investment market. Rising demand from corporate travellers, long-stay contractors, and leisure tourists has created consistent occupancy levels and attractive yields for operators who manage multiple units within a single building. For high-net-worth (HNW) and professional landlords, this asset class offers a balance between residential convenience and commercial income potential.

However, financing these investments requires a very different approach to standard buy-to-let or even single serviced accommodation units. Lenders see them as a hybrid between residential and commercial property, and the criteria they apply are shaped by income streams, operating models, and planning use classifications.

Why Multi-Unit Serviced Apartments Are Gaining Momentum in 2025

The UK’s accommodation market has evolved rapidly in the past five years. Traditional hotels face competition from short-term rental platforms, but there is a clear gap between nightly Airbnbs and traditional long-term lettings. Multi-unit serviced apartments fill that gap — offering guests self-contained accommodation with hotel-style amenities, often for stays of several weeks or months.

For investors, this can mean:

• Higher gross yields than standard buy-to-let
• Multiple revenue streams from a single asset
• Professional management contracts that reduce day-to-day involvement
• Flexibility to pivot between short-term and long-term rentals depending on demand

Data from operators in prime city centres such as Manchester, Birmingham, and Edinburgh shows average occupancy rates of 75–85% for multi-unit blocks, even in off-peak months. This resilience has attracted interest from both portfolio landlords and developers.

How Lenders View Multi-Unit Serviced Apartment Finance in 2025

Most lenders see multi-unit serviced apartments as semi-commercial assets. This means the finance product could fall under commercial mortgage criteria, rather than standard residential buy-to-let rules.

Some of the factors lenders will assess include:

• Planning and Use Class: Many of these properties fall under C1 (hotel) or sui generis use, which affects lender choice.
• Management Structure: Lenders often prefer professionally managed units with proven operational track records.
• Occupancy and Income Evidence: Seasonality is a concern, so historical booking data or forward contracts can improve terms.
• Borrower Experience: A strong track record in property investment or serviced accommodation operation is a major advantage.

At Willow Private Finance, we’ve seen cases where mainstream lenders declined applications due to uncertainty over operational risks — only for specialist lenders to approve funding based on a robust business plan and historical accounts. For example, our recent guide on Financing Serviced Accommodation in 2025 explains how specialist products can work for both single-unit and multi-unit investors.

Investor Strategies for Securing Competitive Finance

If you’re seeking to finance or refinance a multi-unit serviced apartment block in 2025, preparation is key. Lenders are looking for a well-presented proposition that demonstrates consistent income, mitigates vacancy risk, and complies with all licensing and planning requirements.

Strong applications typically include:

• A full operational business plan with forecasted income and expenses
• Evidence of contracts with corporate or agency booking partners
• Demonstrated compliance with safety, licensing, and planning regulations
• A clear ownership and management structure, whether via a limited company or partnership

This is also an area where ownership structure can make a big difference. Many investors choose to hold these assets in a Special Purpose Vehicle (SPV) for tax efficiency and to simplify lender due diligence. Our blog on Limited Company Mortgages Explained explores how SPVs can impact borrowing capacity and product choice.

Mini Case Example: Refinancing a 12-Unit City Centre Block

One of our recent clients owned a 12-unit serviced apartment block in Leeds city centre. Initially purchased with a short-term commercial bridging loan during the conversion phase, the investor wanted to refinance to a long-term mortgage to reduce interest costs and free up capital for a second project.

Challenges included:

• Mixed use classification (retail space on the ground floor)
• A seasonal dip in occupancy during Q1
• The need to prove stable income streams despite fluctuating nightly rates

By preparing a detailed business plan, including signed corporate booking agreements and occupancy data from the previous 18 months, we were able to secure a 70% LTV commercial mortgage at a rate significantly below the bridging finance cost. This also released £450,000 in equity, which the client reinvested into a new development — an approach we also discuss in Using Equity Release for Portfolio Growth.

Why 2025 Is a Strategic Year for This Asset Class

Economic conditions in 2025 — including stabilising interest rates and steady demand from both domestic and international business travel — mean this year offers a strategic opportunity for investors entering or expanding in the serviced apartment sector. Lenders are showing increased flexibility compared to 2023–24, particularly for borrowers with strong operational data and clear compliance records.

However, there are also risks to consider:

• Over-reliance on a single booking platform or market segment
• Potential changes to short-term let regulations in some cities
• Market saturation in smaller towns without sustained corporate demand

Investors who plan for these variables and structure their finance accordingly will be best placed to benefit from the sector’s resilience.

How Willow Private Finance Can Help

At Willow Private Finance, we work with both UK-based and international investors to structure finance for multi-unit serviced apartment acquisitions, conversions, and refinances. By leveraging our network of specialist lenders, we can often secure terms that mainstream banks cannot match — particularly for complex ownership structures or mixed-use properties.

Whether you’re looking to acquire your first multi-unit block or refinance an existing one, we can help you present your case in the best possible light to achieve competitive rates and maximise leverage.

Frequently Asked Questions

What makes multi-unit serviced apartments (MUSA) different from standard residential or single serviced accommodation in the eyes of lenders?
Lenders treat MUSAs more like a hybrid commercial asset. Key differences include:

• Use classification matters: many fall under C1 (hotel) or sui generis rather than standard residential, which narrows lender options. willowprivatefinance.co.uk
• Revenue variability and seasonality risk require lenders to see solid historical booking data and forward contracts. willowprivatefinance.co.uk
• Professional management, corporate booking arrangements, and operational structure are scrutinised heavily. willowprivatefinance.co.uk
• Borrower track record (especially in serviced accommodation or hospitality) is a strong advantage. willowprivatefinance.co.uk

Which lenders are most likely to fund MUSA projects in 2025?
Mainstream residential lenders are generally reluctant. The most viable sources of finance are:

• Specialist lenders with experience in hospitality, mixed-use, or alternative asset finance
• Private banks willing to adopt bespoke underwriting based on global wealth or cross-collateral arrangements
• Commercial mortgage providers that accept hybrid assets, provided the business case is strong

What criteria do lenders apply to approve finance for MUSA projects?
Key elements lenders will expect include:

• Valid planning permission and correct use class for serviced apartments (not just residential) willowprivatefinance.co.uk
• A detailed business plan with projected income, expenses, occupancy forecasts, contingency buffers, and sensitivity analysis willowprivatefinance.co.uk
• Operating evidence such as booking history, occupancy records, and corporate/agency contracts willowprivatefinance.co.uk
• Clear management and ownership structures (often through SPVs or limited companies) willowprivatefinance.co.uk
• Strong borrower credentials and experience in similar assets willowprivatefinance.co.uk
• Ability to mitigate downside risk — e.g. diversifying tenant channels, maintaining high standards, robust maintenance reserves willowprivatefinance.co.uk

What levels of LTV or deposit can be expected for MUSA finance?
In one example from the article, a 12-unit serviced apartment block was refinanced with 70 % LTV (i.e. 30 % deposit) under commercial mortgage terms. willowprivatefinance.co.uk That said, many lenders will be more conservative, especially when there is mixed use or uncertain income.

What are the main risks lenders consider — and how can borrowers address them?
Risks:

• Fluctuating occupancy and revenue, especially in off-peak periods
• Changes in short-term let regulations in certain cities
• Over-reliance on a single booking platform or market segment
• Mixed use (e.g. retail or ground-floor commercial) that complicates valuation
• Saturation or competition in smaller towns or secondary markets willowprivatefinance.co.uk

Mitigations:

• Secure long-term booking contracts or corporate lettings
• Show diversified booking sources (corporate, agency, direct)
• Use conservative occupancy and rate assumptions in forecasts
• Structure reserves, contingency funds and maintenance budgets
• Ensure compliance with regulatory, safety, licensing, and planning obligations



How should U.S. or international investors prepare when approaching MUSA finance in the UK?

• Build a strong, lender-ready case: detailed forecasts, historical performance, risk analysis
• Present overseas income or global assets transparently, possibly via cross-collateral or multi-asset structuring
• Use SPV or limited company structures to simplify ownership and liability
• Select lenders who understand hybrid hospitality/real-estate assets, not just residential
• Be ready to act early: having pre-approval or a financing strategy can help you secure opportunities in competitive markets

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