Commercial Mortgages London
Up to 75% LTV · Blended cover

Semi-Commercial Mortgages London

Single-facility finance for property where the residential element is at least 40% of total floorspace, the shop-with-flats archetype that every London borough high street was built to. Up to 75% loan-to-value, blended cover around 145%, interest rates 6.5 to 8.5% pa, 5 to 25 year repayment terms. Active from Kingsland Road and Upper Street to Northcote Road, Rye Lane and the Croydon and Bromley centres.

LTV

Up to 75%

Rate

6.5 to 8.5% pa

Term

5 to 25 years

Blended cover

Around 145%

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Defining mixed-use property, when does semi-commercial pricing apply?

Semi-commercial finance is a single facility funding mixed-use property, typically a commercial unit on the ground floor with one or more self-contained residential flats above. Where the residential element is at least 40% of total floorspace, semi-commercial pricing applies instead of pure commercial investment pricing. Below 40% residential, lenders treat the asset as commercial investment and price it accordingly.

The lending test combines the commercial rent and the residential AST income on a blended basis, with a typical cover requirement around 145%. Lenders take comfort from the residential security, because a flat is easier to re-let than a vacant retail unit if the commercial side falls empty, so semi-commercial routinely prices 50 to 100bps inside pure commercial investment. Loan-to-value of 75% is achievable on standard archetypes through specialist desks, and interest rates currently run 6.5 to 8.5% pa.

Specialist lenders dominate this market. InterBay Commercial, part of OSB Group, and Shawbrook are the two busiest named desks. LendInvest, Together, Aldermore, Paragon, YBS Commercial, Hampshire Trust and Cambridge and Counties also run active programmes for London semi-commercial deals between £150K and £3M. Limited company SPV structures are standard, with individual investor and LLP variations equally accommodated.

Regulation matters here more than on any other product in the range. Most semi-commercial lending is unregulated commercial: the borrower is a limited company or investor and the residential flats are let on ASTs to third parties. Commercial mortgages of this kind sit outside the Financial Conduct Authority's regulated mortgage perimeter and we do not hold FCA authorisation because the products we arrange are unregulated. The exception is where the borrower, or an immediate family member, will personally occupy one of the flats, which can pull the deal into the regulated perimeter, and we refer those to a regulated firm. Stamp duty land tax follows non-residential rates on a genuinely mixed-use property, which is materially cheaper than residential SDLT and is one of the structural reasons London investors favour the format. On a £900K shop with two flats, the SDLT bill is around £34,500.

Underwriting steps for a shop-and-flats deal in the capital

1. Tenancy and split review

We check the residential and commercial floorspace split, the leases on the commercial side, the ASTs on the residential side and the tenant covenant on each.

2. Indicative terms in 48 hours

Three to five specialist semi-commercial lenders quoted on interest rate, loan-to-value, term and fees.

3. Credit pack

Lease pack, AST pack, property file and borrower SPV or individual pack. InterBay and Shawbrook both want clean tenancy evidence up front.

4. RICS Red Book valuation

Separates commercial value, residential value and total. Estimated rental value on the commercial unit is material to the cover test.

5. Credit approval

Specialist desks typically approve within 1 to 2 weeks of valuation on a clean London case.

6. Legal completion and SDLT

Standard mixed-use conveyancing. Stamp duty at non-residential rates applies across the whole property. 3 to 5 weeks typical.

Buyer profiles for the shop-with-flat archetype

  • Investors buying classic shop-with-flats-above stock on London borough high streets
  • Limited company SPV landlords refinancing semi-commercial holdings off maturing fixes
  • Portfolio investors holding a mix of pure commercial and semi-commercial across boroughs
  • Restaurant, bar and takeaway operators buying the freehold with residential upper floors
  • Mixed-use conversions combining ground-floor retail with four to six flats above
  • First-time semi-commercial investors moving up from a residential buy-to-let portfolio
  • Retiring landlords selling individual assets to incoming portfolio investors

The borough high streets where semi-commercial volume sits

London holds more shop-with-flat stock than any other UK city, for the straightforward reason that almost every borough high street was built to exactly that pattern and most of it survives. The active spines run through Kingsland Road and Mare Street in Hackney, Upper Street and Holloway Road in Islington, Green Lanes across north London, Northcote Road and Battersea Rise in Wandsworth, Rye Lane in Peckham and the Walworth Road in Southwark, Uxbridge Road and the town centre parades in Ealing, and the retail cores at Bromley and Croydon. Croydon alone carried 320,991 square metres of town-centre floorspace in 2012, the second largest concentration in Greater London after the West End, and a meaningful share of the secondary parades around it are mixed-use. Change-of-use cases are a regular profile: former banks converted to hospitality with residential potential above, and upper-floor offices converted to flats over retained retail. Lender appetite is strong throughout, with InterBay Commercial, Shawbrook, LendInvest, Together, Aldermore, Paragon and YBS Commercial all quoting actively.

Semi-Commercial Mortgage FAQs

Mixed-use property where the residential element is typically 40% or more of total floorspace. Below 40% residential, lenders treat it as pure commercial investment and price it accordingly. The valuer measures gross internal area on each element and the lender takes that split as evidence.
InterBay Commercial, Shawbrook, LendInvest, Together, Aldermore, Paragon, YBS Commercial, Hampshire Trust and Cambridge and Counties. Each carries a slightly different LTV, covenant and minimum-loan profile, which is the whole reason to benchmark rather than go direct. Interest rates from 6.5% pa on clean stock.
Yes. InterBay and Shawbrook routinely quote 75% LTV on standard shop-with-flats archetypes. The blended cover test still has to pass at around 145%, so if the rents are tight the loan-to-value gets capped by the cover test rather than by the headline maximum. On higher-value central London stock the yield often binds before the LTV does.
Generally unregulated. Semi-commercial lending against let mixed-use property sits outside the Financial Conduct Authority's regulated mortgage perimeter, because the borrower is a limited company or investor and the residential flats are let on ASTs to third parties. We do not hold FCA authorisation because the products we arrange are unregulated. The exception: where the borrower or an immediate family member will personally occupy one of the residential flats, the deal can fall inside the regulated perimeter, and in that case we refer the enquiry to a regulated firm.
Stamp duty land tax follows non-residential rates on a genuinely mixed-use property: 0% to £150K, 2% from £150K to £250K, 5% above. On a £900K shop with two flats the SDLT bill is around £34,500. That is materially cheaper than the residential SDLT, with the additional-property surcharge, that would apply to a pure residential equivalent, and it is one of the structural reasons London investors favour semi-commercial.
Yes. Limited company SPV is the standard structure for new semi-commercial acquisitions in London. Specialist desks such as InterBay are entirely comfortable with newly incorporated SPV borrowers backed by a director personal guarantee. Existing trading limited companies, LLPs and individual investors are equally accommodated.

Other Commercial Mortgage Services

Owner-Occupier

Investment

Portfolio Refinance

Trading Business

Remortgage

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