Leicester Commercial Mortgage FAQ

A commercial mortgage is long-term debt secured against income-producing or owner-occupied commercial property, offices, retail, industrial, semi-commercial shop+flats, healthcare, hospitality and trading-business premises. In the Leicester market for mid-2026, typical facility size 150K to 10M pounds; LTV 65 to 75 percent; term 5 to 25 years; rate 6.0 to 9.0 percent pa. Repayment is normally monthly capital and interest on a reducing balance. The lender takes a first legal charge over the property and usually a personal or limited company guarantee. See our commercial mortgage services for the full eight-product breakdown across owner-occupier, investment, semi-commercial, portfolio refinance and trading-business.

No. Commercial mortgages are unregulated lending and fall outside the FCA's regulated mortgage perimeter. We are not FCA-authorised because the products we arrange are unregulated by definition. We place owner-occupier, investment, semi-commercial (where the borrower does not occupy the residential element), portfolio refinance, trading-business, commercial remortgage, commercial bridging and second-charge commercial. Regulated cases (semi-commercial where the borrower occupies the residential element, regulated bridging, residential mortgages, consumer buy-to-let) are referred to an FCA-authorised firm. Most commercial mortgage brokers operate the same way, because the underlying products do not require FCA authorisation.

A commercial mortgage is secured against commercial property, offices, retail units, industrial, healthcare, leisure, semi-commercial shop+flats, trading businesses. Residential buy-to-let is secured against single houses or flats let to tenants on assured shorthold tenancies. Underwriting is fundamentally different: residential buy-to-let leans on the borrower's personal income and rental yield; a commercial mortgage tests tenant covenant and lease length on investment, or EBITDA cover on owner-occupier and trading-business. Most commercial mortgages sit outside the FCA regulated mortgage perimeter; residential buy-to-let is usually unregulated unless it is consumer or family-let. Do not apply for a buy-to-let against a shop with flat above, it will decline; that is a semi-commercial mortgage.

Three primary audiences and our week splits roughly evenly across all three. Owner-occupier business buyers, buying or refinancing the freehold of premises their own business trades from. Dental partnerships on Stoneygate, accountancy firms on New Walk, light-industrial trades around Braunstone, retail operators in Clarendon Park, hospitality across the city. Commercial property investors and landlords, buying or refinancing let commercial assets, single-let or multi-let, sometimes a portfolio of five or more. Trading-business owner-operators, pubs, hotels, care homes, dental practices, MOT garages, day nurseries, buying the operational property and the going concern together. The product, the lender pool and the underwriting style are different across the three; the broker discipline is the same.

A commercial mortgage funds the purchase or refinance of a completed, income-producing or owner-occupied commercial property. Funds drawn in a single tranche at completion. Term 5 to 25 years. Monthly capital and interest. Development finance funds construction or heavy refurbishment and is drawn in tranches against build-progress monitoring, with interest rolled or serviced and capital repaid at exit (sale or refinance) typically 12 to 24 months later. Bridge-to-let sits in between for short-term value-add, buy a vacant or under-let asset, refurbish or re-tenant, then term out onto a long-term commercial mortgage once stabilised. A Cultural Quarter dye-works conversion is a typical bridge-to-let candidate. We broker commercial mortgages and bridge-to-let; we do not place pure ground-up development finance.

Typically 25 to 30 percent for owner-occupier and commercial investment. Semi-commercial often 25 percent. Trading-business (pub, hotel, care home, MOT) sits tighter at 30 to 40 percent, reflecting the specialist underwrite. The deposit must be genuine equity and traceable: accumulated retained profit in the trading limited company, sale proceeds of another asset, family gift with a written declaration, or pension drawdown if structured cleanly. Lenders will not accept a second loan secured against the same property as the deposit. Personal guarantees do not count as equity. On owner-occupier deals where EBITDA cover is comfortable, occasional 80 percent LTV products exist but pricing is materially wider, usually not the right answer.

For owner-occupier, two years of clean filed accounts is the comfortable minimum. We routinely place deals with 12 to 18 months trading where the sector is well understood, dental, GP, pharmacy, established skilled trades, regulated professions. The lender wants to see growing turnover, stable margins and a credible business case for the freehold purchase. For commercial investment the test is tenant covenant and lease length, not borrower trading history, a five-year-old single-asset SPV with a strong tenant lease prices well. InterBay Commercial, Cynergy Bank, Cambridge & Counties and Allica Bank have meaningful flexibility on borrower history that high-street commercial desks will not entertain on the same case.

Yes, and most commercial mortgages in the UK are written into limited companies. For commercial investment, a special-purpose vehicle (SPV) limited company is the standard structure: a single asset or portfolio held in a clean SPV with the SIC code 68209 (real-estate-related activities). For owner-occupier, the borrower is usually the trading limited company itself, with the property held on its balance sheet. Trading-business mortgages can be structured either way, into the trading company or into a separate property-holding limited company that leases the property back to the operating business. Lenders price both routes; the choice depends on tax efficiency, lender appetite and exit planning. We model the alternatives at indicative-terms stage.

Mid-2026 ranges by product type, all inside the 6.0 to 9.0 percent pa band. Owner-occupier on strong covenants in defensive sectors: 6.0 to 7.5 percent pa. Commercial investment with prime tenant on a long lease: 6.5 to 8.0 percent pa. Semi-commercial shop+flat: 7.0 to 8.0 percent pa. Trading-business (pub, hotel, care home, MOT, independent restaurant): 7.5 to 9.0 percent pa. Drivers: LTV, EBITDA or ICR / DSCR cover, lease length, tenant covenant, sector and borrower track record. Five-year fixed rates typically price 25 to 50 basis points above two-year fixes; 25-year terms price flat to 15-year terms.

Arrangement fee: 1 to 2 percent of the facility, often added to the loan rather than paid up-front. RICS Red Book valuation fee: 1,500 to 8,000 pounds depending on asset complexity, sector-specialist (care, hotel, pub) and large investment assets cost more. Legal fees: both sides, your solicitor 2,500 to 8,000 pounds typical for commercial conveyancing, the lender's solicitor recharged at cost 1,500 to 4,000 pounds. Broker fee: usually included in the arrangement fee with no extra charge to the borrower; on complex specialist cases a separate broker fee is sometimes agreed. Exit / redemption fee: some 5-year fixes carry early-repayment charges of 3 to 5 percent in years 1 to 2, tapering. Total fee cost typically lands at 2 to 3 percent of the facility.

Yes, Stamp Duty Land Tax (SDLT) applies to commercial property purchases in England, including Leicester. The non-residential bands run 0 percent on the first 150,000 pounds, 2 percent on the next 100,000 pounds, and 5 percent on the balance above 250,000 pounds. There is no first-time-buyer relief, no second-property surcharge and no annual tax on enveloped dwellings issue (commercial does not engage ATED). Mixed-use property, a semi-commercial shop with a flat above, is taxed entirely on the non-residential rates if the commercial element is genuine, which is materially cheaper than residential stamp duty. SDLT is paid by the buyer at completion through the solicitor. SDLT is a cost the lender will not finance, it must come from your equity.

Indicative terms within 48 hours of a complete enquiry. Full completion typically 4 to 8 weeks for mainstream owner-occupier, commercial investment and semi-commercial. 6 to 10 weeks for trading-business cases (care home, hotel, pub, MOT) reflecting the sector-specialist underwrite, environmental due diligence and specialist RICS valuation. The critical-path item is almost always the RICS Red Book valuation. Faster turnaround is possible on clean owner-occupier deals, fastest recent completion was 22 working days from initial enquiry on a New Walk townhouse, where the borrower had filed accounts ready, a tight legal pack and the lender had recent comparable approvals on file at the same East Midlands valuer.

The Royal Institution of Chartered Surveyors (RICS) Red Book is the global standard for property valuation. Every commercial mortgage lender requires a Red Book valuation by a RICS-registered surveyor on its panel before it will draw down funds. The valuer inspects the property, reviews leases and tenant covenants, examines comparable evidence in the local market, considers the physical condition, and reports on market value, vacant possession value, and (for trading-business) sometimes goodwill value separately. The lender lends against this figure, not against the price the buyer is paying or the seller is asking. Aggressive valuation assumptions are the most common reason commercial deals stall at credit committee. East Midlands valuers cost 1,500 to 8,000 pounds depending on asset complexity.

Yes, and you need a solicitor experienced in commercial property and commercial finance, not your residential conveyancer. The lender instructs its own solicitor to act on the loan documentation; you instruct your solicitor to act on the property purchase or refinance. The two solicitors negotiate the facility agreement, the first legal charge, the debenture, the personal guarantee, the security pack, conditions precedent and CPSE replies. Standard commercial conveyancing runs three to four weeks from instruction; complex multi-asset cases longer. Legal fees both sides typically 4,000 to 12,000 pounds combined. We can recommend Leicester commercial property solicitors who are familiar with the lender desks on our panel, which materially helps the timeline.

Owner-occupier: two years of filed accounts, current management figures, a six-month projection, deposit proof, identity and address verification, the property sale memorandum, source-of-funds documents. Commercial investment: the lease, tenant covenant pack (tenant's accounts where relevant), rent roll, occupancy history, the SPV pack (incorporation, beneficial ownership, accounts if seasoned), deposit proof, identity. Trading-business: sector-specific evidence on top of the owner-occupier pack, CQC inspection reports for care, Ofsted for nursery, VOSA approval for MOT, NHS contract value for dental, occupancy and ADR for hotel, barrelage and licence for pub. We send a tailored document checklist on the first call.

For property inside the city boundary the planning authority is Leicester City Council and the public access portal is rcweb.leicester.gov.uk/planning (Idox-hosted). Filter by application type "Full" and use class E(g), B2 or B8 to surface offices, light industrial and storage / distribution. For property outside the city the relevant district council applies: Oadby and Wigston Borough Council for Oadby and Wigston; Blaby District Council for Meridian Business Park, Enderby and Narborough; Charnwood Borough Council for Loughborough and Birstall; Harborough District Council for Lutterworth and Magna Park; Hinckley and Bosworth Borough Council for Hinckley. Where a property purchase depends on a planning consent, lenders want sight of the decision notice and any conditions before drawdown.

Yes, in two directions. Heritage character on a converted hosiery warehouse in the Cultural Quarter typically helps the file: stable mixed tenant base, strong rental tone, character that holds value through cycles. Shawbrook and LendInvest have been active on Halford Street and Rutland Street warehouse investments. The Waterside regeneration zone runs differently: managed workspace, life sciences tenants at Pioneer Park, and emerging mixed-use. Lender appetite is sector dependent. Modern Dock 1 to 4 stock with research-and-development tenants attracts Shawbrook, InterBay Commercial and LendInvest; canal-side leisure and food and beverage are tougher and usually need a stronger covenant. We map the lender appetite by sub-area on the first call.

Yes, but the deal anatomy is different from city-centre stock. Magna Park at Lutterworth sits inside Harborough District Council, anchored by DHL, Toyota, Argos and other large covenants on long leases. Investment lots tend to be 5 million pounds plus, with institutional and high-net-worth buyers competing. Lender appetite is concentrated with specialists and challengers that can underwrite single-asset 20-year leases at 60 to 65 percent LTV: Shawbrook, InterBay Commercial, OakNorth, private credit on the larger lots. Pricing for 8+ year unexpired lease, strong covenant: 6.5 to 7.5 percent pa. Shorter leases push deals to specialist desks at wider pricing. We know the underwriters who quote on Magna Park lot sizes.

Yes, dental is one of the cleanest sectors in commercial mortgage lending and Stoneygate, with its concentration of independent practices on Allandale Road, London Road and Francis Street, is well understood by the lender panel. Healthcare-friendly desks (Lloyds healthcare, NatWest healthcare, Hampshire Trust Bank, Allica Bank health, Cambridge & Counties) compete on freehold-plus-goodwill facilities at 65 to 75 percent combined LTV. Pricing for an experienced principal or partnership in the 6.5 to 7.5 percent pa band on a 15 to 20 year term. The lender will want CQC registration, NHS contract value, two years of practice accounts and a goodwill valuation. Associate buy-outs of retiring principals are a recurring pattern.

Yes, the Leicester lender panel covers the wider Leicestershire footprint comfortably. Oadby and Wigston sits inside its own LPA (Oadby and Wigston Borough Council); commuter-town professional services, dental, small industrial in South Wigston. Loughborough sits inside Charnwood Borough Council; strong industrial pipeline along the A6, plus the Loughborough University fringe. Lender appetite in these areas is strong because tenant covenants in commuter towns tend to be reliable. Lloyds, NatWest, Barclays and Santander compete on cleaner owner-occupier deals; Shawbrook and InterBay Commercial handle investor and semi-commercial cases up to 75 percent LTV. We also place Hinckley, Market Harborough, Lutterworth and Coalville from the same lender pool.