What counts as semi-commercial
Semi-commercial, or mixed-use, property combines a commercial unit with residential accommodation under one title — typically a shop, café or office with one or more flats above. See our flat-above-shop page for a closer look at this common example.
How it differs from commercial buy-to-let and residential buy-to-let
A pure commercial buy-to-let has only business tenants and no residential element. A residential buy-to-let is let entirely to individuals or families. Semi-commercial sits between the two, and lenders offering mixed-use mortgages assess both income streams together, often using a different rate and criteria set from either pure category.
How lenders assess two income streams
Affordability assessment depends on the lender, the borrower and how the property will be occupied. Lenders may consider rental income, trading income and, where relevant, personal income. We will explain the assessment that applies to your circumstances. The proportion of value or income attributable to each use can also affect which lenders are willing to consider the case.
Valuation of mixed-use property
A mixed-use valuation usually apportions value between the commercial and residential elements, reflecting that they may attract different buyers, different yields and different levels of demand even within the same building.
When the borrowing may be regulated
The regulatory position depends on the borrower, the property, how the security is used and any applicable exclusions. Mixed-use property requires an assessment of the proposed loan as a whole. Relevant facts include whether the borrower is an individual or trustees, and how much of the land is used, or intended to be used, as or in connection with a dwelling by the borrower or a related person (see the FCA Perimeter Guidance, PERG 4.4). The adviser handling the case will confirm the position before recommending finance — we will not ask you to work it out yourself.
Separate leases and access
Lenders will want to understand whether the residential and commercial parts have separate access, services and leases, or whether they are more interlinked. Clear separation generally makes a property easier to value, let and eventually sell.
Deposit and LTV
Lenders set their own maximum loan-to-value for semi-commercial property, which may differ from either pure commercial or pure residential lending. The mix of uses, the strength of each income stream and the overall deposit all play a part.
How our advice is paid for
The Mortgage Genie can assess eligible semi-commercial and mixed-use mortgage enquiries through Primis. Whether we can advise on your case depends on the property, the borrowing and our permitted service. If specialist referral is needed, we will explain this before making an introduction.
Initial advice is free. If you go ahead, any fee will be explained and agreed with you in writing before chargeable work begins. A lender or finance provider may also pay commission.
We will assess your requirements and explain the finance routes that may be available. Where specialist support or an introduction is required, we will explain who will handle the case and any associated costs or commission.
We handle residential and buy-to-let mortgages, including Ltd Co buy-to-let, directly within our permitted service. For commercial and other specialist finance, our team will discuss your requirements and, where appropriate, identify a suitable partner adviser. We will explain who they are and obtain your permission before sharing your details.