| Typical property | Shop, café or office with flats above |
|---|---|
| Maximum LTV | Usually up to 70–75% |
| Term | Typically 5 to 25 years |
| Affordability test | Combined rent from commercial and residential parts |
| Borrower types | Individuals, limited companies, SPVs |
| FCA regulated? | Usually not, unless you or family will live there |
Who is this for?
- Investors buying a parade shop with flats above
- Business owners buying premises and living upstairs
- Landlords refinancing mixed-use property
- Developers converting upper floors into flats
- Buyers of high street property in London and regional towns
What is a semi-commercial property?
A semi-commercial, or mixed-use, property has a commercial element and a residential element within one building or title. The classic example is a high street shop with one or two flats above.
Other examples include offices with apartments, pubs with living accommodation, and buildings with ground-floor restaurants. Because standard buy-to-let lenders will not usually lend on commercial space, you normally need a semi-commercial or commercial mortgage.
Lenders also consider the split between uses. A building where the residential part is the larger share may be treated more favourably. A mainly commercial building with a small flat may be assessed as fully commercial.
How do lenders assess a semi-commercial mortgage?
Lenders mainly look at the combined rental income, the property's value and your experience. Rent from both parts usually needs to cover the interest by a set margin, similar to buy-to-let interest cover tests.
- Commercial lease: tenant strength, lease length and break clauses.
- Residential tenancies: market rent and whether flats have separate access.
- Split of use: some lenders prefer a higher residential proportion, which can mean better terms.
- Vacancy: an empty shop can reduce the amount you can borrow.
If you own four or more mortgaged buy-to-let properties, lenders may treat you as a portfolio landlord and review your wider portfolio too.
How much can I borrow on a mixed-use property?
Most semi-commercial lenders lend up to around 70–75% of the property's value. The figure depends on rental cover, location, the condition of the building and how much of it is residential.
Properties in strong locations with long commercial leases tend to achieve better terms. Buildings needing refurbishment may need a bridging loan first, with a term mortgage once work is complete and units are let.
Lenders will also check the length of the commercial lease and any break clauses falling within the mortgage term.
Is a semi-commercial mortgage regulated?
Most semi-commercial mortgages for investors are not regulated by the FCA. If you or a close family member will live in the residential part, and at least 40% of the property is used as a home, the mortgage is likely to be regulated.
Regulated status gives you more consumer protection. We will tell you clearly which applies before you proceed. Your property may be repossessed if you do not keep up repayments.
Should I buy in my own name or a limited company?
Many investors now buy mixed-use property through a limited company or special purpose vehicle. The right structure depends on your tax position, other income and long-term plans.
We can arrange finance for either route, but we do not give tax advice. Speak to an accountant first. Our guide to buying through a limited company covers the main points to discuss.
Whichever route you choose, lenders will assess all owners or directors, and usually ask directors for personal guarantees.
What are the risks of semi-commercial property?
Mixed-use property can offer attractive yields, but it carries risks that pure residential investment does not.
- Commercial voids: shops and offices can take longer to re-let, and rent stops while they are empty.
- Business rates: the owner may be liable for business rates on an empty commercial unit, after any relief period.
- Repairs and compliance: commercial leases, fire safety and building regulations add complexity.
- Narrower resale market: fewer buyers and lenders can mean longer sale times.
Most semi-commercial lending is not FCA regulated. Make sure you understand the lease terms and your obligations before you buy.
How does OMB help with semi-commercial finance?
Appetite for mixed-use property varies widely between lenders. Some treat it close to residential investment, while others price it as fully commercial.
As an independent, whole-of-market broker, OMB knows which lenders favour which property types and splits. We present the income, leases and plans clearly so the lender understands both halves of the building.
Where a building needs work first, we can also arrange the short-term finance and plan the refinance from the start.
Run the numbersLTV, monthly payment, debt service and rental cover for commercial property.
Commercial mortgage calculatorHow we arrange it
- Free 15-minute call
- We review the leases, rents and property details
- We shortlist lenders that suit the property mix
- Valuation, legal work and offer
- Completion
Example cases
Illustrative examples based on the type of case we arrange. Not specific clients; every case is different.
£735,000 semi-commercial mortgage at 70% LTV on a shop with two flats in Ealing
£250,250 semi-commercial mortgage at 65% LTV with a vacant shop unit in Margate
£378,000 at 70% LTV for a pharmacist buying her shop and the flat above
From the blogBuying a shop with a flat above: a semi-commercial checklist for 2026
Read the articleFrequently asked questions
What is a semi-commercial mortgage?
It is a mortgage on a property with both commercial and residential parts, such as a shop with a flat above. Lenders assess the combined rent, the value of the whole building and your experience. Terms often fall between buy-to-let and fully commercial lending.
How much deposit do I need for a semi-commercial property?
Most lenders need a deposit of at least 25–30%, as they typically lend up to 70–75% of value. A higher residential proportion, strong tenants and a good location can help. Vacant or poorly let buildings often need a larger deposit.
Can I live in the flat above my shop?
Yes. If you or a close family member will live in the residential part, the mortgage may be regulated by the FCA, which brings extra consumer protection. Fewer lenders offer regulated semi-commercial loans, so it helps to use a broker who knows them.
Can I get a semi-commercial mortgage with an empty shop?
Possibly. Some lenders will lend on a vacant commercial unit, but they may reduce the loan or require you to show rental demand. Others will only lend once a lease is signed. A bridging loan can be an option while you find a tenant.
Can a first-time investor get a semi-commercial mortgage?
Some lenders will consider first-time landlords, especially with a good deposit and solid personal finances. Many prefer some property experience. We can identify the lenders most open to newer investors. A larger deposit, a clean credit record and a property in good condition can all widen your options.
Can I split the title and sell the flats separately?
Often, yes, but you need lender consent and correct legal work. Creating long leases on the flats can change the value and how lenders view the property. Speak to your solicitor and us before restructuring the title. Selling flats off can also trigger early repayment charges or a partial redemption of your mortgage.
Is stamp duty different for mixed-use property?
Yes. Mixed-use property is usually charged at non-residential stamp duty rates in England and Northern Ireland, which can be lower than residential rates. Rules have specific conditions, so confirm with your solicitor or tax adviser. See our stamp duty guide for the basics.
Can I convert the upstairs into more flats?
Yes, subject to planning and building regulations. A bridging or refurbishment loan may fund the purchase and works, followed by a semi-commercial or buy-to-let mortgage once complete. Lenders will want to see costs, timescales and a clear exit. Allow for planning timescales in your exit plan.
Are interest-only semi-commercial mortgages available?
Yes, many investment lenders offer interest-only terms. You need a clear plan to repay the loan at the end, such as sale or refinance. Interest-only keeps monthly payments lower, but the full debt remains outstanding. Some lenders also offer part-and-part, mixing repayment and interest-only.
Important: Commercial mortgages and most business finance are not regulated by the FCA. Your property may be repossessed if you do not keep up repayments on loans secured against it.