Flat above a shop mortgage

Flat above a shop mortgage “I have helped many property professionals scale their property portfolios and achieve their goals . If you are looking for a mortgage broker to navigate you through the mortgage process then you are in the right place. “

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Flat above a shop mortgage
Flat above a shop mortgage
Flat above a shop mortgage

Flat above a shop mortgage

Flats that are above commercial are usually more complicated to get a mortgage on however very much possible. Flats above shops tend to be cheaper to purchase than regular flats as the demand for these types of property can be less. For a buy to let investor though this type of property can be great if they are chasing the best yields. This great article explains more about buy to let yields.

What to consider when buying a flat above a shop

The most important thing to consider when buying a flat above a shop is what type of business is based below the flat. Some lenders would deem flats above restaurants, dry cleaners and nightclubs to be a liability to sell if they had to repossess the property and sell to the open market. Lenders will be guided by the surveyors and from experience we have seen some surveyors state that re saleability could be affected with these types of properties. It’s not impossible to find a lender to lend on these types of properties, however it’s best to speak to a mortgage broker who is able to assess your circumstances and recommend the best product for your needs. 

Flat above a shop mortgage

Mortgage rates for flats above shops

There are lenders who specialise in these types of properties however the rates are generally more than your mortgages on standard property types. It depends on what type of commercial property is below the flat you’re looking to purchase. A mortgage broker will be able to guide you and recommend the best lender and mortgage product to suit your circumstances.

Why do mortgage lenders consider this type of mortgage application riskier?

The key factor at play is that potential future marketability of the property. Before making decisions in terms of lending, lenders seek assurance that the property can be easily sold in the future, especially if they need to repossess it and recover their costs.

Reselling property situated above or in close proximity to commercial properties tends to be more challenging. The demand is typically lower due things like noise, cooking odours, and potential anti-social behaviour, all of which could discourage prospective buyers.

It’s advisable to carefully consider purchasing a property above commercial premises for similar reasons; living there may not be enjoyable, and selling it might pose challenges.

You do have one major benefit though. These types of properties are usually located in town centres and cities which means you pretty much have all you need and more at your doorstep.

Purchasing a shop and a flat above

There are lenders who wold be happy to provide a mortgage on a shop with a flat above. These types of properties sometimes come with the freehold making the flat a freehold flat. Some properties have the titles already split. Lenders have different appetite’s on lending depending on the situation. 

Buy To Let mortgage flat above shop

Similar to residential mortgages for flats above a shop, buy to let lenders will restrict the size of the flat. There are however more lenders available for a buy to let mortgage flat above a shop. Most lenders will not lend if the flat is above a pub, nightclub and takeaway restaurants due to re saleability being effected. However for investment properties lenders will evaluate the area the property is located in and will consider lending on flats above pubs, nightclubs and takeaway restaurants.

How can we help?

Over the years we have helped many individuals and families secure a mortgage product with no ERCs. We provide advice and recommendations according to your circumstances when obtaining a mortgage. Our advisors assess your circumstances and then advise and recommend according to your needs

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Flat above a shop mortgage

About the author

Hemal is an expert in mortgages and has successfully helped many people buy and remortgage their properties by fully assessing your needs and making advice and recommendation that suits your circumstances.
Hemal started the business during the pandemic and put customer service and expert advice at the forefront. Hemal has had media publications like BBC news, BBC radio and other media sources.
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