SEMI-COMMERCIAL INVESTMENT MORTGAGES
Residential property investment has been incredibly successful over the last six or seven years; mainly due to the Buy to Let style investment. Buy to Let investment has put “bricks and mortar” investment within easy reach of the average man on the street.
A lack of social housing, the advent of the Assured Short Hold Tenancy (AST), combined with cheap finance has paved the way for huge growth in the number of private landlords. However, at the present time, conditions for new investors in buy to let are somewhat difficult, due to the interplay of values, rent and the availability of finance.
Are there any alternatives?
The answer is ‘yes’ - Semi Commercial Investment.
An example of semi-commercial investment would be a building that is not used exclusively for commercial purposes i.e. there is some residential element, combined with a commercial occupier.
Good examples would include:
- A restaurant, with a flat above
- Shops with flats above
- Offices with flats above
Why invest in semi commercial property?
The opportunity to purchase an asset that combines all the benefits
of buy to let property, with the additional stability of a commercial
property. A very sensible risk management strategy overall, as the
income yields are generally higher on commercial properties, and the
tenants are generally locked into long term commercial leases, with
upward only rent reviews.
How are semi commercial investments funded?
The vast majority of traditional residential mortgage and buy to let lenders are
unable to fund such investments. There are however a number of more
specialist lenders, some of which do not deal with the general
public directly but through
commercial brokers such as ourselves.
Typical loan to values are 70% to 80%, although up to 100% LTV is
possible depending upon the income the investment generates and if
additional supporting security is available.
Please note:
Where the residential living space accounts for more than 40% of the
total area, by Sq Ft, residential mortgage regulation will apply;
requiring special procedures. Please make us aware of this, during
contact/discussions.
