As the High Street reopens and social activities return, albeit outdoors, uncertainty remains around recovery timelines. A key question is how quickly vacant commercial spaces will fill. Furthermore, the shift to remote work continues to influence office space demand, leaving long-term trends unclear.

While interest in commercial mortgages is increasing, lenders are still selective. Businesses that thrived during lockdown, such as takeaways or warehouses, find financing easier. However, industries like pubs, struggling even before the pandemic, face steeper challenges in securing funds.

Innovative lenders like Together are taking bold approaches to affordability assessments. For example, they funded a small hotel whose income declined during the pandemic. By incorporating income from another business, they enabled the deal to progress. Their flexibility in assessing affordability up to 65% Loan-to-Value demonstrates adaptability in these challenging times.

As the market evolves, resilience and innovation are shaping recovery. Lenders like Together highlight the financial sector’s ability to adapt to changing circumstances. This adaptability is crucial as businesses and investors navigate a reshaped commercial landscape.

Commercial or Super Specialist Buy to Let? | A closer look at commercial & BTL lenders

Commercial lenders often adopt a cautious approach to mitigate risks in specific sectors. However, they remain committed to supporting lending, particularly in the intricate Buy-to-Let (BTL) market. Notably, while BTL lenders accommodate properties such as HMOs and Multi-Unit Blocks (MUB), they typically impose restrictions on bedroom or unit numbers. For example, most BTL lenders cap this range between four and eight units. On the other hand, commercial lenders, including well-known names like Interbay, demonstrate greater flexibility. Some lenders even extend their support to larger properties with up to 20 bedrooms or units, showcasing their broader scope.

Lending to Limited Companies

A key area of differentiation arises in lending to limited companies, where commercial and BTL lenders diverge significantly. While many BTL lenders cater to Special Purpose Vehicle (SPV) limited companies, commercial lenders are willing to consider more complex corporate structures. Lenders such as Shawbrook and Hampshire Trust are challenging the prevailing notion that SPV BTL arrangements are the only viable option. These lenders accept applications from trading companies involved in diverse business activities beyond property management.

Supporting Unique Borrower Scenarios

For instance, professionals like plumbers, who retain profits in their trading businesses, may wish to use those funds as a deposit for BTL purchases. In such cases, commercial lenders excel due to their expertise in handling the additional complexities of these scenarios. Their adaptability and understanding make them an essential choice for borrowers with unique financial arrangements or business needs.

Bridging Gaps in the Buy-to-Let Market

By bridging gaps in the market, commercial lenders continue to play a vital role in facilitating transactions beyond the conventional scope of BTL arrangements. Through tailored solutions, they ensure opportunities remain accessible to a wide range of clients.

Commercial or Super Specialist Buy to Let? | Commercial lender support

The invaluable support of commercial lenders extends to businesses owned by offshore companies or trusts, exemplified by the plumbing enterprise mentioned earlier. In such complex scenarios, the commercial lending sector plays a crucial role, showcasing its proficiency in navigating the intricacies associated with international and trust-owned businesses. This versatile approach underscores commercial lenders’ distinctiveness and pivotal role in addressing diverse and intricate financial situations.

Expanding on the real estate landscape, there are noteworthy developments in Holiday Let properties. The surge in popularity of domestic travel due to international restrictions has led to a significant uptick in holidaying within the UK. Media reports highlight substantial increases in holiday let bookings as vacationers shift their focus to the UK for this year’s getaway. Holiday let mortgages are readily accessible from Buy-to-Let (BTL) lenders and are gaining traction, particularly after the alterations in mortgage interest relief taxes.

Investors holding holiday let properties in their own names, operating them as businesses by HMRC rules, can fully leverage mortgage interest deductions for comprehensive higher-rate tax relief. This trend signifies a compelling opportunity for investors to navigate the evolving landscape of holiday property investments.  “Commercial or Super Specialist Buy to Let?”