UK landlords are scrambling to find new ways to boost returns amid tightening regulations and rising costs. A growing number are turning to semi-commercial properties, which can offer more favourable tax conditions and improved rental yields.
Specialist lender LendInvest has responded to this trend by launching a range of semi-commercial buy-to-let mortgage products, offering two and five-year fixed rates starting from 5.94%. These products are available to both individual and corporate borrowers, with applications processed through specialist mortgage intermediaries.
Data from LendInvest shows a significant expansion in the mixed-use sector, which now accounts for around one quarter of all commercial lending activity. The lender reported a doubling of semi-commercial finance applications during 2024, followed by an increase of nearly 60% in the first half of 2025.
One of the key attractions for investors is the potential for lower acquisition taxes. Unlike purely residential investment properties, mixed-use or non-residential transactions qualify for commercial Stamp Duty Land Tax (SDLT) rates, which are often significantly lower than the residential rates and associated surcharges. For example, commercial SDLT rates currently stand at 0% for properties up to £150,000, 2% for the portion between £150,001 and £250,000, and 5% for the portion above £250,000.
Investors seeking to optimise their portfolios in a dynamic market are increasingly drawn to semi-commercial investments. These can offer attractive cash flow, longer commercial leases, and diversified income streams. However, they also demand careful due diligence and an understanding of distinct lending criteria and tenancy arrangements.