Equestrian land mortgage

A mortgage for an equestrian property falls outside residential mortgage regulation under MCOB where less than 40% of the land is used as a dwelling by the borrower or their family, so more than 60% is in commercial or business use. In these circumstances, a standard residential or semi-commercial mortgage is not permitted, and the property must be funded using a commercial mortgage.

This applies to equestrian properties where the land and facilities are used for activities such as livery, schooling, training, breeding, competitions, or other income-generating equestrian businesses.

When an Equestrian Property Becomes Commercial

An equestrian property is typically treated as commercial where:

• More than 40% of the overall use is non-residential or business related
• There is regular income generation from equestrian activities
• Facilities extend beyond private leisure use

Examples include:

• Livery yards
• Riding schools
• Training and competition yards
• Breeding or stud farms
• Equestrian centres with arenas, stabling, and grazing land

Once this threshold is exceeded, the loan falls outside MCOB and must be assessed under commercial lending criteria.

Loan-to-Value (LTV)

Commercial mortgages for equestrian property are typically available at up to 65-75% loan-to-value, depending on the asset mix and income profile.

LTV is influenced by:

• Proportion of land used for equestrian business versus residential use
• Quality and permanence of facilities (arenas, stables, gallops)
• Type and stability of income
• Size, location, and alternative use potential of the land

Properties with strong residential elements and transferable land value are more likely to achieve higher leverage.

Affordability and Lending Assessment

Affordability is assessed on a commercial, income-led basis, not personal income multiples. Lenders will review:

• Historic trading accounts or income evidence
• Livery or lesson income sustainability
• Diversification income (events, clinics, storage, grazing licences)
• Cost structure and seasonality

Debt Service Coverage Ratios (DSCR) are applied conservatively due to income volatility common in equestrian businesses.

Valuation Methodology

Valuation of equestrian property is specialist and often multi-layered:

• Land value, assessed per acre
• Residential value, where a main dwelling is present
• Commercial value, reflecting income-generating facilities

Valuers typically apply vacant possession assumptions, with income used to support value where it is sustainable and transferable. Highly specialised or over-developed equestrian facilities may be valued more conservatively.

Equestrian mortgage criteria

Commercial lenders will closely assess:

• Degree of specialisation and re-sale risk
• Planning status and permitted use
• Quality and condition of equestrian facilities
• Environmental and land-use considerations
• Reliance on owner involvement

Equestrian properties that could revert to agricultural or lifestyle use tend to attract stronger lender appetite.

Where an equestrian property exceeds the 40% commercial use threshold under MCOB, it must be funded using a commercial mortgage. With borrowing typically available at up to 75% LTV, commercial equestrian finance is suitable for livery yards, riding schools, and other equestrian businesses, provided income sustainability, land value, and alternative use potential are aligned with lender risk criteria.