The trend for property investors to explore alternative opportunities, such as semi-commercial, continues and lenders are responding with improved propositions and more competitive rates.
Semi-commercial contains elements of both residential property and commercial property – so, for example, a building that contains a shop on the ground floor and flats on the floors above. Traditionally the rates on semi-commercial mortgages have been more expensive that traditional Buy to Let loans as banks are required to set aside more capital for lending on commercial property than on residential property.
In response to this, we now work with a couple of lenders that will offer more competitive rates on semi-commercial properties where there is a greater weighting towards the residential part of the property.
This means, for example. that a lender may offer a better rate on a semi-commercial property containing three flats above a shop than property where there is only one above the commercial premises.
With greater focus on energy efficiency, lenders are also looking more favourably at properties with better EPC ratings and there are often cheaper rates available for those properties rated A to C, for example. Where a property has a lower rating, the owners may be able to make changes to improve its rating ahead of refinancing at a potentially lower rate in the future.
Overall, lending appetite is returning to the commercial market, with criteria being relaxed and lenders more willing to take a view on individual cases and grow their lending in this sector.
If you have clients who are interested in diversifying their portfolio and you want to leverage the relationships and expertise we have at Brightstar, pick up the phone and give us a call. We’ll be happy to discuss how we could help your clients invest in commercial property, including semi-commercial.
