Semi Commercial Mortgage in North Devon
Due to the implementation of the 3% Stamp Duty surcharge on second properties investors began to take more interest in commercial and semi-commercial properties. These types of property are exempt from the 3% surcharge. However, because they have a mix of residential and commercial it offers a balance mix of risk and reward.
Here are some examples of property types that are classified as semi-commercial.
- Shops with flats above
- Offices with flats above
- Pubs with self-contained living accommodation
- B&Bs with owner’s accommodation
- Home based health and beauty clinics
Semi-Commercial Mortgages are available from a limited range of lenders and will typically have higher rates than residential mortgages. The arrangement fees will vary from around 0.75% to 2% and interest rates will often be ‘Bank of England Base rate’ plus 3% or more. Mortgages can be on either Capital and Interest or Interest Only basis.
If the residential element of the property is on a Buy-to-Let basis, the interest coverage ratio will be applied to that element.
The commercial element will be judged on a mix of the business performance as shown through its accounts and/or the lease arrangements depending on whether the applicant is an ‘owner occupier’ (in other words they are the business owner), or whether the applicant is a landlord investor and the business is tenant only.
Next?
At Aspire Financial Services we have helped several clients in both ‘owner-occupier’ capacity and investors seeking to maximise their returns. To find out more, call to book your free 30 minute consultation.
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