Pub property finance
Finance for a public house with owner or letting accommodation, funded on trade and the building together.
Financing pub with accommodation
A pub with accommodation is a licensed trading business with self-contained living quarters above or behind the bar, sometimes with additional letting rooms. It sits in the semi-commercial bucket because it combines a commercial element, the trading pub, with a residential element, the accommodation. Lenders underwrite both the bricks and the trade, so the books matter as much as the building, and the loan is sized on a blend of the property value and the sustainable profit the pub generates.
We are a finance arranger and introducer, not a lender. Pub finance here means property finance, not a brewery or equipment loan, and we cover the full range. For a tenanted or operator-let pub the loan looks more like a semi-commercial investment mortgage on the rent. For a freehouse the owner runs themselves, it is an owner-occupier case tested on business affordability and debt service cover. Where a purchase must complete quickly or sells at auction we arrange bridging; where the pub needs refurbishment to reopen or trade up we arrange light or heavy refurbishment finance; and where part of the site is being converted to flats we arrange development finance. The accommodation adds a residential income or owner-occupation strand that lenders factor into the whole.
Configurations we finance
- Freehouse run by the owner with living accommodation above
- Tenanted or leased pub let to an operator
- Pub with letting rooms run as part of the trade
- Former pub with consent or plan for partial residential use
Indicative terms
- Indicative rate6.5 to 8.5% a year
- Owner-occupier rate6.0 to 7.5% a year
- Loan to valueUp to 70 to 75% of value
- Deposit25 to 30%
- AffordabilityTrade-based or 125 to 140% ICR
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
How we fund a pub with accommodation
For an owner-run freehouse we size a term loan on business affordability and debt service cover from the trade, typically to 65 to 70 percent loan to value, with owner-occupier rates from 6.0 to 7.5 percent. For a tenanted pub let to an operator we work from the rent at an interest cover ratio of around 125 to 140 percent, to 70 to 75 percent of value at 6.5 to 8.5 percent. Deposits run at 25 to 30 percent on a 5 to 25 year term. Where a deal must complete fast or is bought at auction, semi-commercial bridging at about 0.70 to 0.95 percent a month carries it until the trade is proven and a term loan refinances it. Where the pub needs work to reopen or trade up, light or heavy refurbishment finance funds the scheme, and a part-residential conversion of the upper floors or rear is funded by semi-commercial development finance on a loan to cost and GDV basis. Lenders look closely at trading history, the strength of any operator covenant, and whether the accommodation is integral or separately lettable.
Lender appetite for licensed premises
A focused field of specialist lenders funds pubs, including Shawbrook, Together, Cynergy Bank, Cambridge & Counties and Hampshire Trust Bank, with some high street and clearing banks active for strong freehouse and operator covenants. Lenders want to see two to three years of trading accounts for an owner-run pub, or a sound operator and lease for a tenanted one. A pub in a viable location with a real food or accommodation trade attracts more competitive terms than a wet-led pub in structural decline.
Exit and refinance options
An owner-run pub typically refinances at the end of its term once the trade is established and the accounts support a better rate, often onto a semi-commercial remortgage. A tenanted pub refinances on the proven rent roll. Where a purchase needs to complete quickly, the trade needs rebuilding, or part of the site is being converted to residential, semi-commercial bridging can fund the deal and works before a term loan or sale repays it. A change to part-residential use can also open a residential refinance on that element.
Finance structures that suit this sector
- Owner-occupier semi-commercial mortgageFor a freehouse you run and live above yourself.
- Semi-commercial investment mortgageFor a tenanted pub let to an operator on rent.
- Semi-commercial mortgageCore term loan across the trade and accommodation.
- Semi-commercial bridgingFast or auction completion, or works before a term refinance.
- Heavy refurbishment financeRefurbish to reopen or trade the pub up.
- Semi-commercial development financeConvert part of the site to flats on a loan to cost and GDV basis.
Finance a pub with accommodation
A view on lenders and likely terms within one working day.
What underpins a pub's numbers
A pub with accommodation derives its value from the sustainable trade and the bricks together, not the building alone. Lenders model the maintainable profit, apply a trade-related valuation, and fund an owner-run freehouse on debt service cover or a tenanted pub on rent stressed at an interest cover ratio of around 125 to 140 percent. The accommodation adds an owner-occupation or residential strand that lenders factor into both the value and the affordability.
Indicative pub mortgage rates
We arrange pub mortgages with accommodation from 6.5 to 8.5 percent a year for an investment or tenanted pub, and 6.0 to 7.5 percent for an owner-occupier freehouse tested on business affordability, to 65 to 75 percent loan to value with a 25 to 30 percent deposit over 5 to 25 years. A fast completion or a trade turnaround can run on semi-commercial bridging at 8.5 to 11 percent a year before a term refinance.
Local commercial planning activity
Recent commercial planning records relevant to pub with accommodation, drawn from local-authority data.
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Smithfield Birmingham Masterplan, Bullring, Pershore Street, Birmingham B5 6PB
Hybrid planning application for the redevelopment of Smithfield Birmingham to provide a mixed-use scheme including residential, retail, F&B, leisure, hotel, office and public realm, by Lendlease Europe and Birmingham City Council
View on the planning portal → -
3 Centenary Square (Three Centenary Way / Paradise Phase 3), Broad Street, Birmingham B1 2DT
Detailed planning application for office building of approximately 280,000 sq ft Grade A office accommodation with retail / F&B at ground floor, Paradise Birmingham Phase 3, Argent and Birmingham City Council JV
View on the planning portal → -
Fort Dunlop, Fort Parkway, Erdington, Birmingham B24 9FE
Refurbishment of existing office and retail accommodation at Fort Dunlop, including Class E reconfiguration and energy-efficiency upgrades
View on the planning portal → -
Martineau Galleries, Corporation Street, Birmingham B4 6BU
Hybrid application for the redevelopment of Martineau Galleries to provide residential, hotel, retail, F&B, office and public realm at the eastern end of New Street, Hammerson and Lendlease
View on the planning portal → -
Selly Oak Life Sciences Park, Bristol Road, Selly Oak, Birmingham B29 6JD
Outline application for life-sciences and university-spinout commercial accommodation adjacent to QE Hospital and University of Birmingham campus
View on the planning portal → -
Sutton Coldfield Town Centre Masterplan, Birmingham Road, Sutton Coldfield B72 1QH
Outline application for mixed-use redevelopment of Sutton Coldfield town centre, including retail, leisure, residential and public realm improvements
View on the planning portal →
Frequently asked questions
Can you get a mortgage on a pub?
Yes. A pub with accommodation is funded by a semi-commercial mortgage, sized on a blend of the building value and the sustainable trade. Specialist lenders fund both owner-run freehouses and tenanted pubs let to operators.
What are the rates for pub mortgages?
Indicatively 6.5 to 8.5 percent a year for an investment or tenanted pub, and 6.0 to 7.5 percent for an owner-occupier freehouse tested on business affordability. Rates depend on the trade, location and covenant.
How much can you borrow to buy a pub?
Typically 65 to 75 percent of value, with a 25 to 30 percent deposit. The loan is sized on debt service cover from the trade for an owner-run pub, or on the rent at an interest cover ratio of 125 to 140 percent for a tenanted one.
Do lenders count the living accommodation?
Yes. The accommodation forms the residential element of the semi-commercial asset. Whether you live there or let it, lenders factor it into the value and the affordability when sizing the loan.
Financing a pub with accommodation?
Tell us about the property and we will come back with a view on lenders and likely terms.