Office with flat above finance
Finance for an office at ground or lower level with residential accommodation above or alongside.
Financing office with residential
An office with residential is a mixed-use property where commercial office space sits below or beside self-contained living accommodation, often a converted period building on a high street or in a town centre. Like other semi-commercial assets it is funded on the strength of two income streams, and the commercial element and the residential element are valued and stressed together rather than as separate properties.
We arrange the finance and introduce you to lenders, we do not lend ourselves, and we cover the whole range for this asset. That can be a term mortgage to hold or to trade from yourself, bridging to buy quickly or at auction, light or heavy refurbishment finance to modernise the office or convert upper floors to flats, or development finance for a larger office-to-residential conversion. The key questions a lender asks are the split between office and flat by floor area or value, whether the residential part has independent access, and the covenant behind the office tenant. Where part of the office has been or could be converted to residential under permitted development, that can shift the property toward residential treatment, which we model before placing the case.
Configurations we finance
- Ground-floor office with flats on the upper floors
- Period building part-office, part-residential
- Office with a self-contained residential annexe
- Part-converted building mid-way between office and residential use
Indicative terms
- Indicative rate6.5 to 8.5% a year
- Owner-occupier rate6.0 to 7.5% a year
- Loan to valueUp to 70 to 75% of value
- Deposit25 to 30%
- Term5 to 25 years
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
How we fund an office with residential above
For a hold, we size a term facility on the combined office and residential rent, stressed at an interest cover ratio of around 125 to 140 percent. Investment cases run to 70 to 75 percent loan to value with a 25 to 30 percent deposit on a 5 to 25 year term, while an owner-occupier using the office for their own business is tested on business affordability and can see rates from 6.0 to 7.5 percent. Where the purchase must complete fast or the building is bought at auction, semi-commercial bridging at about 0.70 to 0.95 percent a month carries it until a term refinance. Where the office is dated or the upper floors are being turned into flats, light or heavy refurbishment finance funds the works, a bridge-to-let facility runs the refurbishment and term loan together, and a fuller office-to-residential conversion is funded by semi-commercial development finance on a loan to cost and GDV basis. A separate residential entrance and a let or lettable office both strengthen the valuation and widen the field of willing lenders.
Lender appetite for office and flat buildings
Specialist and challenger banks including Shawbrook, InterBay Commercial, Allica, Aldermore, Cynergy Bank and Hampshire Trust Bank fund office-with-residential buildings, with high street lenders such as Santander and Barclays in play for strong owner-occupier cases. Lenders look at the office demand in the location, the residential rental market for the upper floors, and the proportion of value in each part. A higher residential weighting can open more lenders but may push the case toward residential underwriting rules.
Exit and refinance options
The usual exit is a term refinance once the building is income-producing and the value established, often onto a semi-commercial remortgage to release equity or improve the rate. Where the office is being repositioned or the residential part needs work, semi-commercial bridging can fund the purchase and works, exiting onto a term loan when the rent roll is settled. If the upper floors are converted to add residential value, a remortgage on the higher value can return much of the original equity.
Finance structures that suit this sector
- Semi-commercial mortgageCore term loan across the combined office and residential value.
- Mixed-use mortgageFor a building that blends office and residential use on one title.
- Owner-occupier semi-commercial mortgageWhere you trade from the office yourself.
- Semi-commercial bridgingFast or auction purchase, or repositioning before a term refinance.
- Heavy refurbishment financeConvert upper floors to flats before refinancing.
- Semi-commercial development financeFund a larger office-to-residential conversion on a loan to cost and GDV basis.
Finance a office with residential
A view on lenders and likely terms within one working day.
How an office with residential is valued
An office with residential combines an office rent and a residential rent into one blended income that drives the valuation. Lenders capitalise the combined rent at a semi-commercial yield, stress it at an interest cover ratio of around 125 to 140 percent, and weigh the proportion of value in each part. A higher residential weighting can broaden lender choice but moves the building toward residential underwriting once the residential element passes roughly 40 percent of floor area or value.
Indicative office with residential rates
We arrange semi-commercial mortgages on an office with residential from 6.5 to 8.5 percent a year, to 70 to 75 percent loan to value with a 25 to 30 percent deposit over 5 to 25 years. An owner-occupier trading from the office is tested on business affordability and can see 6.0 to 7.5 percent, and repositioning or conversion before a term loan can run on semi-commercial bridging at 8.5 to 11 percent a year.
Local commercial planning activity
Recent commercial planning records relevant to office with residential, drawn from local-authority data.
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Smithfield Birmingham Masterplan, Bullring, Pershore Street, Birmingham B5 6PB
Hybrid planning application for the redevelopment of Smithfield Birmingham to provide a mixed-use scheme including residential, retail, F&B, leisure, hotel, office and public realm, by Lendlease Europe and Birmingham City Council
View on the planning portal → -
3 Centenary Square (Three Centenary Way / Paradise Phase 3), Broad Street, Birmingham B1 2DT
Detailed planning application for office building of approximately 280,000 sq ft Grade A office accommodation with retail / F&B at ground floor, Paradise Birmingham Phase 3, Argent and Birmingham City Council JV
View on the planning portal → -
Curzon Investment Plan, Eastside Locks, Cardigan Street, Birmingham B4 7BL
Outline application for mixed-use redevelopment of Eastside Locks within the Curzon Investment Plan area, including office, residential, hotel and F&B, supporting HS2 Curzon Street station enabling works
View on the planning portal → -
103 Colmore Row, Colmore Business District, Birmingham B3 3AG
Internal refurbishment and Cat A fit-out of floors 7 to 12, prime CBD office building, scheme led by Sterling Property Ventures
View on the planning portal → -
Beorma Quarter Phase 2, Digbeth High Street, Birmingham B5 4BU
Mixed-use scheme: 36-storey residential tower, 19-storey hotel, 10-storey office building and ground-floor retail / F&B, fronting the Curzon Investment Plan area
View on the planning portal → -
Fort Dunlop, Fort Parkway, Erdington, Birmingham B24 9FE
Refurbishment of existing office and retail accommodation at Fort Dunlop, including Class E reconfiguration and energy-efficiency upgrades
View on the planning portal →
Frequently asked questions
Can you get a mortgage on an office with a flat above?
Yes. An office with residential upper floors is funded as a semi-commercial or mixed-use mortgage, sized on the combined office and residential rent. Specialist lenders fund these readily where the residential part has its own access.
Is it better to buy the whole building or just the office?
Buying the whole mixed-use building lets one lender fund both elements on a single facility, often at a non-residential stamp duty rate, which can be cheaper than residential rates on higher values. Stamp duty is an HMRC matter and you should take advice.
What deposit do I need for an office with residential?
Around 25 to 30 percent, for a loan to value of 70 to 75 percent. Owner-occupiers trading from the office can sometimes access keener rates because the case is tested on business affordability.
Does converting the office to flats change the finance?
It can. Adding residential floor area shifts the property toward residential treatment and may change which lenders and rules apply. We model both the office-led and residential-led routes before placing the case.
Financing a office with residential?
Tell us about the property and we will come back with a view on lenders and likely terms.