SUMMARY
A shop with flats above doesn't sit neatly in a residential or a commercial box, which is why it falls between the desks at most lenders. We assess the two elements separately and add them together: up to 60% on the commercial, up to 75% on the self-contained residential, from 0.85% per month.
This guide sets out how that blend works, what we will and won't lend on, and a real deal at 70% LTV with the arithmetic shown.
A semi-commercial property combines commercial and residential use under a single title. The most common form is a shop or office on the ground floor with one or more flats above - the classic high street parade unit.
Because the building has to be assessed as two different kinds of asset at once, semi-commercial tends to fall between the desks that handle purely residential and purely commercial lending. A specialist facility that prices the two elements separately is usually the cleaner way to fund one.
Yes. The more useful question is why you’d use a bridge rather than a straightforward term deal - and the answer depends on what needs doing to the building to enhance its existing value.
The typical case is asset management. You’ve bought, or you already own, a building that isn’t working as hard as it could. A bridge gives you the time and the capital to change that before you refinance onto long-term money. In practice that usually means one of:
Repurposing the commercial element - changing the use of the ground floor to something that lets better, or lets at all
Enhancing the planning position - improving what the building is consented for
Reconfiguring the residential elements - making the upper parts self-contained, splitting them into more units, or converting to HMO use
Refurbishing the upper parts so they let at a proper rent rather than a compromised one
If the building already works and you simply need to hold it, a term deal is the better tool. Bridging earns its keep where there’s a job to do and a clear exit once it’s done.
Facilities run from £100,000 to £20m - the same range that applies across our lending.
The important part is that we assess the two elements separately, then add them together:
Element | Maximum LTV | Basis of valuation |
|---|---|---|
Commercial | 60% | Vacant possession value |
Self-contained residential | 75% | Vacant possession value |
Because the residential side carries the higher leverage, the mix matters. The split generally needs to be in favour of the residential element, generally measured by floor area. The deals that work best are a small shop on the ground floor with the bulk of the building given over to residential uppers. A building that’s mostly commercial with a single flat tucked above it is a harder ask.
The result is a blended LTV rather than a single headline number. The worked example below shows exactly how that arithmetic falls out.
Valuation basis. Everything is valued on a vacant possession basis. That said, the strength of the covenants still matters when we assess the loan - a good tenant on a sound lease is a material positive even though we’re not lending against the investment value.
A vacant shop is not a problem. If the commercial element is empty, that’s absolutely no issue for us. In many cases it’s an advantage, because vacancy is what creates the opportunity to change the use.
Rates. From 0.85% per month.
Term. Up to 24 months.
Fees. A 1% arrangement fee, plus valuation and legal costs. No exit fees.
Exits. We’ll consider all of the usual routes: refinance onto a semi-commercial or commercial mortgage, a buy-to-let facility against the residential element, sale of the asset, or a combination of the above.
What we will and won’t lend on
Property type | Appetite |
|---|---|
Shop with flats above | Yes |
Office with flats above | Yes |
Retail with an HMO above | Yes |
Pub or restaurant with accommodation | No |
Care or medical use | No |
A note on regulated deals
If you or a member of your family lives in the flat above, the loan is likely to be a regulated one. Tradelend lends on an unregulated basis only, so we wouldn’t be able to help with that deal. It’s better to say so plainly here than to have you find out three weeks in.
A parade unit in east London - a shop at ground floor with two residential units above. Approximately 32% commercial and 68% residential by floor area, valued at £715,000.
The facility: £500,000 at 70% LTV, 0.89% pcm, interest serviced, 1% fee at inception.
The loan refinanced the borrower’s existing indebtedness and released working capital to fund the works: reconfiguring the upper parts to form three flats out of the existing two units, subject to the requisite planning consent, and refurbishing the shop so a new tenant could sign into a new and improved lease on the ground floor.
How the 70% was reached
The 70% is a blended figure, not a headline LTV. Here’s the working:
Element | Value | Max LTV | Maximum advance |
|---|---|---|---|
Residential (68% by floor area) | £486,000 | 75% | £364,500 |
Commercial (32% by floor area) | £229,000 | 60% | £137,400 |
Total | £715,000 | - | £501,900 |
The facility was written at £500,000, just inside the maximum the two elements supported between them - 70% of value on a blended basis.
Neither element was stretched beyond its individual limit. Because the building was predominantly residential by floor area, the blend landed at 70% - comfortably above what the commercial element alone would have supported, and a good illustration of why the residential-weighted split matters.
What is a semi-commercial bridging loan?
A short-term facility secured against a property that combines commercial and residential use under one title - most often a shop or office with flats above. It’s used to buy, refinance or reposition the building, with a defined exit onto longer-term finance or a sale.
Is it hard to get finance on a mixed-use property?
It needs a lender that is set up for it. Because the building has to be assessed as two different kinds of asset at once, semi-commercial sits outside the standard residential and commercial boxes. We assess the two elements separately and blend them, which is what makes these deals workable.
What LTV can you get on a semi-commercial property, and what deposit is needed?
Up to 60% against the commercial element and up to 75% against the self-contained residential element, both on a vacant possession basis. The two are added together, so the effective LTV across the whole building depends on the mix - the more of the building that is self-contained residential, the higher the blend. The worked example above shows how that falls out on a real deal. Note that leverage runs off vacant possession value rather than purchase price, and the arrangement fee, valuation and legal costs sit on top.
Can you finance a shop with a flat above under one loan?
Yes. That’s exactly what a semi-commercial facility does - a single loan across the whole building, with the two elements assessed separately for leverage purposes.
How long can a semi-commercial bridge run?
Up to 24 months.
Will you lend if the shop is empty?
Yes. A vacant commercial element is no obstacle, and it often improves the case, because it gives you the opportunity to change the use without having to work around a sitting tenant.
What does a semi-commercial bridge cost?
Rates start from 0.85% per month, with a 1% arrangement fee plus valuation and legal costs. There are no exit fees.
Speak to us about a semi-commercial deal
You’ll deal with the same experienced person from first call to redemption.
All rates, LTVs and terms shown are indicative and subject to valuation, underwriting and credit approval. Tradelend lends to experienced property investors, traders and developers on an unregulated basis for business purposes only.
