Mixed use Commercial Property Investment MortgagesSpeak to one of our experts020 4525 5312
Finance for mixed use property
- Terms up to 20 years
- £50,000 – No Maximum
- Rates from 2% over base rate
- Specialist lenders
- Individual arrangements tailored to your circumstances
- Any type of mixed use property
- Repayment and interest-only available
- Repayments geared to your revenue stream
Refinance existing property
- Refinance existing mixed use property investment
- Up to 80% Loan to Value available
- Free up investment
- Reduce costs
Mixed use commercial property investment
Mixed-use property can provide a sound investment but the costs involved will mean that you will need to call on external finance. At Rangewell, we can help secure the funding you need.
Residential property has been hit by various legislative measures in the past few years, which can make a residential buy to let a lot less rewarding than it once was. Mixed-use property, on the other hand – which often simply means a shop, office or restaurant with a flat above — is classed as commercial, so the stamp duty is lower, and only kicks in at properties costing £150,000 or more and comes without the surcharge imposed on residential buy-to-lets.
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SDLT on commercial and mixed-use properties can be at least 50% cheaper than on a standard residential investment property. This significantly more favourable tax treatment, both in transaction tax and the treatment of rent and interest, is accompanied by better yields and the potential for fewer voids. A good tenant is always worth keeping as with any other kind of property investment, but remember that if you have the right property in the right location, businesses will be very keen to rent your property too.
There are many sorts of mixed-use properties available to investors looking to diversify. They include pubs with self-contained living areas, guesthouses and caravan parks where the owner has a permanent residence, and shops where the owner lives above the retail part of the premises.
As with other BTL investments, you may be able to benefit from both capital growth and revenue from the rental if you choose the right property.
But whatever your plans, property costs are high - and getting finance for a mixed-use property can sometimes be difficult. Mortgages can be harder to come by on mixed-use premises because they cannot be financed with a traditional buy to let mortgage because of the commercial element, A commercial mortgage can provide the solution.
Commercial mortgages operate much like residential mortgages and are secured on the property itself. Generally, commercial mortgages allow you to spread the cost of your property purchase over 15 years or more.
However, the rates and terms for a commercial mortgage are arranged individually. Before they will make an offer, lenders will look at your accounts and projections for revenue from the property, and set interest rates based on the level of risk they believe it presents to them. There will be valuation, arrangement and legal fees and additional costs for the services of professional advisors which will add substantially to the initial costs.
Commercial mortgage deals can be either fixed-rate or variable rate, and you may be able to choose between a repayment mortgage option where you pay the capital and interest back each month or an interest-only mortgage, where you only pay the interest.
Commercial mortgages are arranged on an individual basis, and some lenders will consider funding HMO investment properties - so getting expert support to find the right deal is essential.
As well as using a mortgage to buy your property, it may be possible to remortgage a property you already own - providing either a substantial source of cash that you might use elsewhere or as a way of reducing your monthly outgoings with a more attractive interest rate.
At Rangewell, we help businesses of all kinds find the finance they need. We cover the entire UK lending market, which means we can help you find the most cost-effective property finance for your property investment needs.
Even a fraction of a percentage point can make a substantial difference to what you actually pay, while fees and penalties can complicate the position still further.
At Rangewell, we work with lenders across the market. It lets us ensure that you have the financial solutions you need. Our knowledge can not only help you secure the funding you need - it can save you a great deal of cash.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Last update: 8 April 2023
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