Commercial mortgages can cover mixed

Commercial mortgages can cover mixed-use properties such as a shop with a flat above, with specialist lenders able to structure the deal against the entire building's blended income.

A mixed-use (or semi-commercial) property combines commercial and residential elements, most commonly seen as retail units on the ground floor with residential flats above. High street buy-to-let lenders generally reject these assets because they fall outside standard residential underwriting criteria. Instead, these require specialist commercial finance.

Commercial lenders evaluate mixed-use properties favorably because the income streams are diversified; if the commercial unit is vacant, the residential tenants still provide cashflow, and vice versa. Underwriting is based on the blended rental yield of the entire building. One significant advantage of mixed-use property is that it qualifies for commercial Stamp Duty Land Tax (SDLT) rates, completely bypassing the punitive 3% residential surcharge. Furthermore, commercial valuations are heavily influenced by the yield rather than just comparable bricks-and-mortar sales, allowing astute investors to force appreciation by increasing the commercial rent.