Semi-Commercial Property Finance
The UK podcast on funding mixed-use property, hosted by Georgina. A shop with a flat above fails a residential mortgage and is priced wrong for a pure commercial one, so every episode is a plain English walk through the product built for the building in between: what a semi-commercial mortgage costs, how lenders classify the asset, the deposit you actually need, and how the loan is sized on the combined rent from both parts of the building.
Here is the idea the whole show turns on. Before any lender talks about a rate, they ask about the split: how much of the building is commercial and how much is residential, measured by floor area or by value. The working guideline across the market is the 40 percent rule. Where the residential element is around 40 percent or more, lenders tend to treat the building as residential and a specialist buy to let desk may be the right home. Below that line it is a semi-commercial asset and it goes to the semi-commercial lenders. It is a rule of thumb, not a statute, and each lender draws its own line, but it decides which desks will look at your building, the margin they will charge, and in some cases whether the loan is regulated at all. We work out the split before we approach anyone, and our guide to the 40 percent rule shows how to do the arithmetic yourself.
Once the building is classified, a mixed-use mortgage is built the same way as any commercial loan: a reference rate plus a margin, with the margin set by the tenant, the lease, the leverage and the borrower's track record. Deposit and loan to value are the same number from opposite ends, and most lenders advance up to 70 to 75 percent of valuation, so 25 to 30 percent comes from you. Then the income test, which is where mixed-use property earns its keep: the loan is sized on the combined rent from the commercial unit and the residential part, tested against an interest cover ratio of 125 to 140 percent at a stressed rate, and the lower of that figure and the loan to value cap is what the lender will actually lend. Two rental streams from one building often carry more debt than a single let, and if the shop goes empty the flat keeps paying.
This is the show for the people who buy, hold and fund those buildings: investors and landlords letting the shop and the flat, traders buying the freehold of their own premises, developers building mixed-use schemes, and the brokers, accountants and solicitors around them. We cover the full range of semi-commercial mortgage and specialist products in plain terms
- Semi-commercial investment mortgages: a let shop and flat underwritten on the rent, the lease and the tenant's covenant, usually held in a limited company, sized on value and on combined rental income.
- Owner-occupier mortgages: a business buying the premises it trades from, tested on the accounts and the business debt service cover rather than a rent roll, and priced a little keener than an investment loan.
- Semi-commercial bridging: speed for an auction lot completing in 28 days, a building with an empty commercial unit that no term lender wants until it lets, or a title that needs splitting, priced per month with the exit agreed before completion.
- Bridge-to-let: one lender funds the bridge for 3 to 18 months and rolls it into a term mortgage automatically once the property is let, which takes the exit risk off the table.
- Refurbishment and development finance: light cosmetic works over a few months, heavy structural works with the build cost released in stages, and ground-up mixed-use schemes funded against cost and against end value.
- Remortgage and portfolio finance: a better rate, equity release against a let building, the exit from a bridge, and several mixed-use properties folded into one facility on the combined value and a portfolio-wide interest cover.
- Mixed-use stamp duty: why a shop with a flat above is charged at the non-residential scale, and what that does to the arithmetic against the residential rates and surcharges.
We are a finance arranger and introducer, not a lender. We take each case to the whole market rather than one desk, across the lender camps that fund mixed-use property: high street banks, challenger banks, specialist semi-commercial lenders and bridging lenders, because the lender that likes a shop with a flat above is often not the one that liked your last buy to let. For context, the Bank of England base rate sits at 3.75 percent, held at the July 2026 decision, and every quote turns on the split, the leverage, the income cover and the borrower, so treat figures on the show as indicative published bands, never an offer. Semi-commercial finance for business and investment borrowers sits outside the Financial Conduct Authority regulated mortgage perimeter; where an individual will live in the flat above their own shop, the loan can be a regulated one and we refer those cases to a regulated firm.
Every figure is grounded in real sources: the Bank of England on rates, HMRC on the non-residential and mixed-use stamp duty land tax scale, and the indicative bands we publish and update through the year. The aim is simple: help you work out the split, understand what a semi-commercial or mixed-use mortgage should cost, bring your case to market well, and get from enquiry to completion at the pace the deal needs. You can run the deposit, interest cover and stamp duty arithmetic on your own figures with the semi-commercial mortgage calculators, and the full guides and every episode of this show are at semicommercialpropertyfinance.co.uk.
Hosted by Georgina, with written analysis by Matt Lenzie, who has spent 25 years arranging property finance, much of it on the lender side. New episodes land quarterly, with the occasional bulletin when the rate cycle or the lending criteria shift.
Latest Episodes
Semi-Commercial Property Finance in 2026: The 40 Percent Rule, Rates, Deposits and How Lenders Size a Mixed-Use Loan
Semi-commercial property finance in 2026: the 40 percent rule, what a mixed-use mortgage costs, the deposit you need, and how lenders size a loan on a shop with a flat...
