Commercial Property Investment

This is the term used to describe occasions where the property itself is not residential.  The loan remains an investment mortgage.

Commercial properties can include the following:

  • Shops with flats above (also known as Semi-Commercial)
  • Offices
  • Large retail outlets
  • Industrial units
  • Land
  • Leisure premises

Properties will be let out to an unrelated business under a commercial lease, usually on a fully repairing and insuring basis.

Mortgages can be for a single property, or a portfolio.

Mortgages are available for refinancing or for purchasing new properties.  When refinancing, we can consider Equity Release.

Affordability is again based on rental income.  The length of the lease(s) is also an important factor in determining what loan structure is available.

Loans are capped at 70% loan to value (LTV) however many banks will only go to 60% or 65%.  Interest only terms are also more difficult to secure with many banks only offering on capital and interest repayment terms.

Pricing of these facilities can vary greatly, and it is often linked to the combined loan to value (LTV) and credit quality of the linked individuals.  Interest rates are available in the range of 3.5-7% per annum.  Fixed rates are available.  Arrangement fees are in the range of 1.5-2% of the loan amount which can be added to the facility.

Acceptable customer types include:  Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).

Completion Example

Some examples

Case Studies

Construction Client

Specialist construction client purchasing a used Piling Rig. Purchase Price £190,000 plus VAT.HP loan amount £190,000. VAT Only Deposit. 60 monthly repayments. No balloon.Facility completed

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