Shawbrook updates lending rules to support serviced accommodation growth

Shawbrook has revised its lending criteria to accommodate rising demand for serviced accommodation, responding to a shift in strategy among professional landlords aiming to diversify and boost rental income.

The lender’s latest move comes amid a continued rise in investor activity within the serviced accommodation sector, particularly in multi-unit freehold blocks (MUFBs). According to Shawbrook’s internal data, there was a 14% increase in landlord investment in MUFBs during 2024, with this upward trend persisting into 2025.

To reflect this growing appetite, Shawbrook will now consider lending on portfolios and larger blocks of flats operated as serviced accommodation.

New criteria introduced

Key updates to Shawbrook’s lending approach include:

Loans remain assessed against market rent based on Assured Shorthold Tenancy (AST) valuations, with borrowing of up to 75% loan-to-value (LTV) available across its buy-to-let products.

Portfolios with 10 or fewer units require no additional financial documentation.

For portfolios with more than 10 units, applicants must provide either two years of accounts for established assets or a cashflow forecast for new assets, with income calculated on a nightly basis.

Daryl Norkett (pictured), director of real estate proposition at Shawbrook, explained: “Throughout 2024, we saw a significant rise in landlords exploring investments in MUFBs, and this has continued into 2025 as more landlords seek to diversify their portfolios.

"Our enhanced criteria for serviced accommodation lending reflect our dedication to support landlords as they adapt to market trends and explore new income streams, helping them unlock greater potential and long-term success in the rental market.”