A mixed
A mixed-use block of flats can qualify for commercial mortgage terms if the building contains at least one commercial unit—often unlocking higher LTVs than standard buy-to-let products.
A mixed-use block of flats can qualify for commercial mortgage terms if the building contains at least one commercial unit—often unlocking higher LTVs than standard buy-to-let products.
A mixed-use (or semi-commercial) property is an asset that incorporates both residential and commercial elements within the same freehold. The classic example is a retail shop on the ground floor with two residential flats situated above. From a financing perspective, these properties occupy a highly lucrative gray area.
Mainstream residential buy-to-let lenders will categorically refuse to lend against mixed-use buildings due to the presence of commercial risk. However, specialist commercial lenders embrace them. Commercial lenders value the diversified income profile: residential tenants provide stability, while commercial leases provide long-term, upward-only rent reviews. Because they are assessed under commercial underwriting criteria, stress tests (ICRs) are often more lenient, allowing for higher leverage (LTVs) than if the residential flats were financed independently. Furthermore, the entire building qualifies for the vastly cheaper commercial SDLT rates at acquisition.