SDKA lends £774k for purchase of Yorkshire seafront hotel

SDKA has completed a £774,000 commercial loan to help a returning client buy a seafront hotel in East Yorkshire below market value. The deal completed in under two months.

The 18-month loan covers 90% of the £860,000 purchase price, with interest charged at 1.1% a month.

A landmark building with mixed income

The six-storey property was built in 1930. It includes a 44-bedroom hotel, bars and restaurants, along with 15 apartments used for long-term rentals and holiday lets.

The hotel closed in early 2025. The new owner plans to bring it back into use through a staged refurbishment programme.

The mix of uses could work in the borrower's favour. The apartments can provide rental income while the hotel side is being refurbished, and phasing the work spreads the cost over time rather than requiring it all upfront.

Criteria as a starting point

Lending 90% of the purchase price on a closed hotel is well beyond what most mainstream lenders would consider. The below-market-value purchase price helped make the numbers work, while SDKA's existing relationship with the client gave it confidence in the borrower.

Our lending criteria provides a framework, not a barrier to getting deals done.

Christopher Simpson, Senior Underwriter at SDKA, said no two cases are the same and the lender is willing to look beyond its headline criteria to find solutions. He said a flexible, practical approach allowed SDKA to structure a facility that met the client's needs and complete within their timeframe. He described the deal as a good example of turning a complex opportunity into a successful outcome.