Overview
Converting a redundant farm building or cottage into a holiday let is one of the most proven farm diversification strategies in the UK. Income potential is strong, demand from rural tourism is growing, and the assets are often excellent security. The challenge is finding lenders who understand agricultural income patterns and can assess a holiday let business plan on its merits. Doulton Bridging Finance works with specialist lenders across the whole market to arrange farm holiday let finance for projects at every stage - from pre-planning bridging finance through to long-term commercial mortgages.
Types of Farm Holiday Let Finance Available
Long-Term Property Finance
A commercial mortgage secured on the converted barn or cottage is the most common structure. Terms of 15–25 years are standard; rates from 6.4% APR with specialist lenders. LTV up to 70–75% depending on the asset and lender.
Conversion & Refurbishment
Short-term bridging loans (3–18 months) fund the conversion of redundant farm buildings before refinancing onto a commercial mortgage once the holiday let is income-producing. Rates from 0.79% per month.
Ground-Up Builds
Where new structures are being built - lodges, annexes or new-build cottages - development finance funds the build in staged drawdowns. Typically 60–65% of GDV, repaid on completion via commercial mortgage refinance.
Eligible Properties & Structures
Lenders active in the farm holiday let space will typically consider:
Barn Conversions
Redundant agricultural buildings converted to residential holiday use under Class Q Permitted Development or full planning permission. Strong security and good lender appetite.
Farm Cottages
Existing dwellings on farmland converted or upgraded to holiday let use. Often financed under semi-commercial or mixed-use mortgage products.
Shepherd's Huts & Pods
Moveable structures are generally financed under asset finance or secured loan products rather than standard mortgages. Requires careful lender selection.
Key Lender Criteria
| Criterion | Typical Requirement |
|---|---|
| Business trading history | 2+ years farming (new diversification accepted alongside existing farm) |
| Planning permission | Full planning or Class Q PD confirmed prior to application |
| Income evidence | Projected occupancy rates or comparable occupancy data accepted |
| Security | First charge on holiday let asset; farmland charge also considered |
| Maximum LTV | 70–75% depending on lender and asset type |
| Our lender panel | Shawbrook, Aldermore, Cynergy, UTB, Hampshire Trust, Ipswich BS and more |