Commercial Investment Mortgages London
Long-term mortgages secured against income-producing commercial property: offices, retail, industrial, mixed-use. Up to 75% loan-to-value. Interest cover ratio tested at 140 to 160% stressed. Interest rates 6.5 to 8.5% pa. 5 to 25 year repayment terms. Limited company SPV, LLP and individual structures all supported across Greater London.
LTV
Up to 75%
Rate
6.5 to 8.5% pa
Term
5 to 25 years
ICR
140 to 160%
What is an investment commercial mortgage and how is it underwritten?
A commercial investment mortgage is long-term debt secured against a let commercial property held as an income-producing asset. The borrower is typically a limited company SPV, which is the dominant London structure for new acquisitions, an LLP, or an individual investor. The security is the property and the affordability test is rent against the cost of borrowing. Unlike a residential buy-to-let mortgage, which tests personal income and rental yield against ASTs, commercial investment underwrites against business tenancies on FRI leases.
The headline underwriting metric is the interest cover ratio (ICR): gross rent divided by interest cost, typically required at 140 to 160% stressed at a notional rate 1 to 2% above pay rate. Some lenders also test DSCR, the debt-service coverage ratio, on a fully-amortising basis at 130 to 145% cover. Loan-to-value commonly stretches to 65 to 75% for income-producing assets with a clear lease.
Tenant covenant and lease length are the second-order drivers and they matter as much as loan-to-value. A 10-year unbroken lease to an investment-grade tenant prices materially better than three two-year leases to local independents, and London is where that spread is widest, because the panel here is deep enough that a prime asset gets fought over while a secondary one does not. Vacant or part-let assets fund through specialist desks at tighter LTVs and wider interest rates, typically through commercial bridging with an agreed term-out exit.
Investment commercial lending sits outside the Financial Conduct Authority's regulated mortgage perimeter in almost all cases, because it is a business borrowing against a business asset rather than a residential mortgage. We do not hold FCA authorisation because the products we arrange are unregulated. Stamp duty land tax applies on purchase at standard commercial rates: 0% to £150K, 2% from £150K to £250K, 5% above £250K. On a £1.5M let asset that is around £64,500. For limited company SPV structures we build SDLT, valuation, legal and arrangement fees into the all-in deposit requirement before submission.
Pricing and lender appetite across the London investment market
1. Asset and rent appraisal
We review the property, the lease, the tenant covenant and the rent roll. ICR and DSCR are modelled at three lender stress rates so you can see where each desk will land.
2. Indicative terms in 48 hours
Three to six lender quotes covering interest rate, LTV, term, fees, ICR comfort and conditions. You choose the route before any valuation cost lands.
3. Credit pack
Property file, lease, tenant accounts where covenant matters, borrower SPV pack, deposit proof. Sent to the chosen lender.
4. RICS Red Book valuation
Includes market rent assessment and estimated rental value, both material to the underwrite. Typically 2 to 3 weeks, longer on multi-let London assets.
5. Credit approval and legal pack
Approval typically 1 to 3 weeks after valuation. Legals 3 to 5 weeks, longer where the title is leasehold or the tenant pack is complex.
6. Drawdown and SDLT
Funds drawn at completion and stamp duty paid by the buyer. ICR is sometimes monitored through the life of the facility on larger or multi-let assets.
Investor profiles we routinely place across the 33 boroughs
- Investors buying let offices in the City, Canary Wharf, the West End and the City fringe
- Landlords acquiring let retail across borough town centres and suburban parades
- Industrial and last-mile logistics investors in Park Royal, the Lea Valley and the outer east
- Limited company SPV structures for new acquisitions, individual investors at the smaller end
- Landlords refinancing existing investment holdings off maturing five-year fixes
- Buyers of long-lease freehold investments and ground rents across Greater London
- Investors buying part-vacant assets with a refurbishment and re-letting plan
Where London commercial investment volume actually concentrates
London runs the deepest commercial investment market in the UK by a wide margin. Westminster and the City of London together generated £204.0 billion of GVA in 2023, with Tower Hamlets at £44.8 billion and Camden at £40.2 billion, the three largest borough economies in the country. The City of London alone employed more than 500,000 people as of 2019 across 1.12 square miles, against a resident population of 8,583, which tells you everything about the ratio of commercial to residential stock in the Square Mile. Canary Wharf holds roughly 16 million square feet of office and retail space, around 105,000 workers and the headquarters of more than 150 major businesses. Relative to those two, the next tier of office sub-markets runs through Westminster, then Camden and Islington, then Lambeth and Southwark. The bracket we work most often, £500K to £5M, sits below the institutional tier: secondary offices around the City fringe and Shoreditch, retail and food and beverage in the West End and the borough centres, industrial in Park Royal and the Lea Valley, and mixed-use across Hackney, Lambeth and Newham. Interest rates currently 6.5 to 8.5% pa depending on covenant and LTV. Shawbrook, Allica, Hampshire Trust, Cambridge and Counties, InterBay Commercial, Cynergy Bank, LendInvest, Paragon, NatWest, Lloyds, Barclays and Santander all compete on London investment cases.
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Exploring Commercial Investment Mortgage for your London property?
Free-of-charge scheme assessment. Indicative terms within 48 hours.