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Mortgages for Vacant Commercial Properties: What You Need to Know

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Acquiring Vacant Commercial Premises via Mortgage

Investors can now access mortgage lending to purchase vacant commercial properties through longer-term lending, thanks to new products on the commercial property market. This solution offers investors the flexibility to find a new tenant at their own pace, without needing to do so urgently to secure financing. This new mortgage product considers external income that renders the mortgage repayments affordable, even without a tenant having been secured.

The advantage of this approach is that it cuts down on the expenses associated with short-term bridging finance and eliminates the hassle of securing cost-effective long-term financing after finding a tenant. However, it is important to note that securing a mortgage against unoccupied commercial properties is a less common product on the market, and most lenders will be more likely to lend against an application where steady income can be demonstrated through a tenant.

Deciding whether a vacant property is a viable investment depends on several factors, including whether the property already has a tenant in place. Given that a finance provider is more likely to extend lending to a low-risk proposal, some commercial landlords may opt for a bridging loan to secure the property until a tenant has been found and longer-term lending can be accessed.

Below are the features of the product:

  • Options to choose between interest-only and capital repayment solutions
  • Available to individuals and incorporated businesses

If you are interested in investing in an unoccupied commercial property and require affordable long-term finance, get in touch with us now Our expert team can assess your circumstances and identify the optimal product to meet your requirements.

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Frequently Asked Questions

What are the eligibility requirements for a commercial mortgage?

To be eligible for a commercial mortgage, you must meet certain criteria. Lenders will typically require you to have a good credit score, a stable income, and a strong financial history. They will also consider the value of the property you are looking to purchase, as well as its location and potential for generating income.

Which lenders offer the best rates for mixed-use mortgages?

When it comes to finding the best rates for mixed-use mortgages, it is important to shop around and compare offers from different lenders. Some popular options include high street banks, specialist lenders, and online mortgage brokers. Be sure to consider factors such as interest rates, fees, and repayment terms when comparing offers.

What is the process for getting a mortgage for a vacant commercial property?

Getting a mortgage for a vacant commercial property can be a bit more complicated than getting a mortgage for an occupied property. Lenders may require you to provide additional documentation and information about your plans for the property, such as a detailed business plan or proof of income from other sources. It is also important to note that interest rates and other terms may be less favourable for vacant properties.

Can I get a bank loan to purchase a commercial property?

Yes, it is possible to get a bank loan to purchase a commercial property. However, the eligibility requirements and terms may vary depending on the lender and the specific property you are looking to purchase. Be sure to compare offers from different lenders and consider factors such as interest rates, fees, and repayment terms before making a decision.

What are the differences between a commercial mortgage and a buy-to-let mortgage?

While both commercial mortgages and buy-to-let mortgages are used to purchase property, there are some key differences between the two. Commercial mortgages are designed for properties that are used for business purposes, while buy-to-let mortgages are used for properties that are rented out to tenants. Additionally, the eligibility requirements, interest rates, and other terms may differ between the two types of mortgages.

Are there any restrictions on the type of commercial property that can be mortgaged?

Yes, there may be restrictions on the type of commercial property that can be mortgaged. Some lenders may have specific criteria for the types of properties they are willing to finance, such as minimum property values or certain business uses. Be sure to check with your lender to see what types of commercial properties are eligible for financing.

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Legal Information & Disclaimer

This site is an information only site. All of our articles are written by authorised mortgage brokers for the only aim of providing great, useful, mortgage and loan related information. We intent to offer the best possible suggestions and guides however can’t always guarantee to be perfect, please use the information at your own risk. We can’t accept responsibility if things go wrong. Please contact us via our contact page if you see anything that requires changing and we will do so as soon as possible.

The articles on our site do not provide financial advice. Instead, they aim to equip you with the necessary information to attain your mortgage objectives. 

** The content provided in this page is correct at the time of writing. Mortgage and loan lender’s qualifying criteria and rules change frequently so speak to an adviser to confirm the most up to date rules and criteria. The content on the website is not specific advice to each reader, and does not constitute financial recommendations.