The UK Hotel Finance Landscape 2026
The hotel lending market has stabilised in 2026, with improved liquidity across banks and alternative lenders. Debt is available, but underwriting remains selective, and refinancing is the main source of activity.
Terms and Lenders
Senior debt for prime hotels is typically available at 55%-65% LTV, with current margins at approximately 1.3%-3.75% over base rate and terms of five to 20 years. Banks remain active on core assets, while private credit and debt funds provide more flexible, higher-leverage solutions for value-add opportunities.
Refinancing
Refinancing is the main driver of hotel lending in 2026 as loans from the low-rate period mature into a higher-cost market. Elevated borrowing costs and tighter terms are prompting more extensions, restructurings and selective new lending.
Regional Variations
Lenders remain focused on cash flow, asset quality, location and operator strength, especially as rising costs continue to pressure profitability. London attracts the strongest lender interest, while regional and secondary markets face more selective terms and lower leverage.
The outlook is cautiously positive: debt markets are functioning, but lenders remain selective amid refinancing pressure and rising operating costs. Quality assets and experienced operators are expected to attract the best terms.
Case Study: A recent Christie Finance deal funded the £5.5 million purchase of a large regional hotel with a £3.575 million five-year commercial term loan, amortised over 25 years at 3.25% over base. The structure reflects today’s cautious market, with shorter terms, longer amortisation and strong covenant protection tied closely to trading performance and cash flow.
Read the full market review here: https://www.christie.com/sectors/hotels/uk-hotel-market-review-2026/