Semi-Commercial and Mixed-Use Finance
Semi-Commercial Mortgage UK
Semi-commercial property — buildings combining both commercial and residential elements — sits between mainstream residential and pure commercial lending. A shop with a flat above, an office converted to include apartments, a pub with letting rooms: each presents a blended risk profile that high-street lenders often decline and specialist lenders actively seek. Platinum Global Bridging Finance arranges semi-commercial mortgages and mixed-use finance from £150,000 to £150m+ across the UK. No broker fee on facilities of £500,000 or above.
What Is Semi-Commercial Property?
A semi-commercial or mixed-use property is one that contains both commercial and residential accommodation within the same title. The most common examples are:
- Ground-floor retail or commercial unit with residential flats above
- Office building with converted residential upper floors
- Pub or licensed premises with letting rooms or owner’s accommodation
- Light industrial unit with a manager’s flat attached
- GP surgery or professional premises with residential accommodation
The proportion of residential versus commercial use determines how the loan is regulated and which lenders will consider it. Where the residential element represents more than 40% of the property’s floor area or rental value, the loan is treated as regulated under FCA rules, and the lender pool shifts toward those authorised for consumer credit. Below that threshold, the loan is assessed commercially.
How Semi-Commercial Mortgages Are Assessed
The blended nature of the property means lenders must assess two income streams simultaneously — commercial rent from the ground floor or commercial element, and residential rent or value from the residential units. Assessment approaches vary by lender:
Rental Income Approach
Many specialist lenders assess the total rental income from both the commercial and residential elements, applying a combined DSCR test — typically requiring total income to cover the interest payment by 125% to 145%. This approach favours fully let properties with established rental income from both elements.
Blended Valuation Approach
The property is valued as a single mixed-use asset, with the LTV calculated against the combined valuation. This is straightforward where the property is sold as a single lot but can be more complex where the commercial and residential elements have separate titles.
Separate Assessment
Some lenders assess the commercial and residential elements separately, applying commercial lending criteria to the shop or office and buy-to-let criteria to the residential flats. This approach can produce higher overall LTVs but requires more detailed underwriting and can limit the lender pool.
Lending Criteria for Semi-Commercial Finance
| Parameter | Typical Range |
|---|---|
| Loan size | £150,000 to £150m+ |
| LTV | Up to 75% |
| Term | 3 to 25 years |
| Rate (2026) | 6.0% to 8.5% pa |
| Repayment basis | Interest-only or capital and interest |
| Regulated vs unregulated | Depends on residential % of property |
| Borrower types | Individual, Ltd company, LLP, SPV, trust |
Owner-Occupied vs Investment Semi-Commercial
Semi-commercial properties can be financed on either an owner-occupied or investment basis, depending on who occupies the commercial element. Where the borrower’s own business trades from the ground floor and the residential flats are let, a hybrid assessment is typical — the commercial element assessed on trading income, the residential on rental yield. Where the entire property is let to third parties, the loan is assessed purely on rental income across both elements.
The owner-occupied commercial mortgage page and commercial investment mortgage page provide further detail on each approach.
Semi-Commercial Bridging Loans
Where a mixed-use property is purchased at auction, requires refurbishment before it can be let, or needs to complete quickly before long-term finance is arranged, a bridging loan is the typical short-term solution. We arrange semi-commercial bridging loans for purchases, refurbishments, and refinances, with a clear exit to a long-term semi-commercial mortgage once the property is stabilised. A commercial auction bridging loan can complete in 3 to 10 working days where required.
Challenges with Semi-Commercial Lending
The mixed-use nature of these properties creates specific challenges that make specialist broker involvement important:
- Smaller lender pool: Many mainstream lenders decline semi-commercial entirely. The right specialist lender must be identified from the outset.
- Valuation complexity: Mixed-use valuations require a surveyor experienced in both commercial and residential property markets. An inexperienced valuer may undervalue the asset or fail to correctly weight the income streams.
- Regulated vs unregulated boundary: Getting the residential percentage assessment wrong can result in the wrong lender type being approached, delaying the transaction.
- Lease complexity: Multiple tenancies, mixed lease types, and commercial break clauses all require careful review at the term sheet stage.
Worked Example: Shop with Flats Above
An investor purchases a mixed-use building comprising a ground-floor retail unit let on a 5-year lease at £18,000 per annum, and two residential flats above let at £950 per month each (£22,800 per annum combined). Purchase price: £650,000.
- Total annual rent: £18,000 + £22,800 = £40,800
- LTV: 70% = Loan of £455,000
- Rate: 6.5% pa interest only
- Annual interest: £29,575
- DSCR: £40,800 / £29,575 = 1.38x (above the 1.25x minimum)
- Arrangement fee: 1.5% = £6,825
- Deposit required: £195,000
No broker fee applies. The strong blended DSCR and established rental income across both elements support a competitive rate from a specialist mixed-use lender.
Frequently Asked Questions
Is a semi-commercial mortgage regulated or unregulated?
It depends on the proportion of residential use. Where the residential element is more than 40% of the property by floor area or rental value, the loan is regulated. Below 40%, it is assessed commercially and is unregulated.
Can I get a semi-commercial mortgage if the commercial unit is vacant?
A vacant commercial unit makes the application harder but not impossible. Some lenders will assess on the market rental value of the vacant commercial space alongside the established residential income. A bridging loan is often more appropriate where the commercial element needs refurbishment or a new tenant before mainstream lenders will consider the property.
What LTV is available for semi-commercial properties?
Most specialist lenders offer up to 70% to 75% LTV for semi-commercial assets with established rental income across both elements. Vacant or partially let properties typically attract lower LTVs.
Can I refinance a semi-commercial property I already own?
Yes — semi-commercial remortgages are common, often to release equity, move to a better rate, or restructure ownership. We arrange refinances as well as purchases.
Does Platinum Global charge a broker fee?
No broker fee on facilities of £500,000 or above.
Our Commercial Property Finance Solutions
About Us
Platinum Global Bridging Finance is a distinguished high-net-worth finance broker. We specialize in providing tailored financial solutions, including Property Bridging Finance, Development Finance, Single Stock Loans, Margin Stock Loan, Crypto Finance, Crypto Backed Loans and Commercial Property Finance tailored to meet the diverse needs of our clientele seeking robust financial lending solutions.
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