Commercial buy-to-let mortgages

Complex buy-to-let

At Buy-to-let Direct we have seen an increase in what we think of as ‘complex’ buy-to-let cases involving, for example, limited company applications, Houses in Multiple Occupation (HMOs) or Multi-Unit Blocks (MUBs). These can present opportunities for landlords to avoid the recent changes to personal buy-to-let tax relief or to generate more rental income for their properties.

HMOs and MUBs have always been popular with professional landlords due to the potential for greater rental yields from multiple tenants and there are plenty of buy-to-let mortgage lenders to choose from for these types of properties.

Semi-commercial properties

Since the Stamp Duty hike in 2015, introducing a 3 per cent surcharge on second homes, we have seen a growing interest from landlords in semi-commercial properties. Typically, this would mean a commercial unit such as a shop with a residential component above it, which wouldn’t be subject to the stamp duty increases and could present a good investment opportunity.

Factors for you to consider if you are thinking about investing in a semi-commercial property include:

• lenders often prefer the residential element to make up over 50 per cent of the building
• separate access to the residential unit is normally part of standard underwriting criteria
• minimum square footage of residential flats above commercial units needs to be met
• applicants should ideally have prior letting experience

Buy-to-let Direct has a number of specialist lenders available on its online buy-to-let mortgage finder who provide semi-commercial finance, such as Interbay and Shawbrook Bank, and we have an extensive list of other lenders via our specialist commercial finance team.