Doctors surgery property finance
Finance for a surgery, dental practice or professional premises with residential accommodation above.
Financing surgery or professional premises with flat
A surgery or professional premises with a flat pairs a ground-floor clinical or office unit, such as a doctors surgery, dental practice, veterinary clinic or solicitors office, with self-contained residential accommodation above. It is a semi-commercial asset funded on the strength of both parts, and these buildings are often favoured by lenders because the commercial tenant tends to be a stable, professional occupier on a long lease.
We arrange the finance and introduce you to lenders, we do not lend, and we cover the full range for this asset. The case can run as an investment, where a practice leases the ground floor and the flat is let separately, or as an owner-occupier deal where the practitioner trades from the premises. Beyond the term mortgage, we arrange bridging for a fast or auction purchase, light or heavy refurbishment finance to bring the premises up to a clinical standard or refurbish the flat, and development finance where the upper floors are being converted to add residential. Lenders look at the covenant behind the professional tenant, the length of the commercial lease, and the residential lettability of the flat. A long lease to a healthcare or professional occupier is a strong, defensible income that supports competitive terms.
Configurations we finance
- Doctors or dental surgery with a flat above
- Veterinary or healthcare premises with residential accommodation
- Solicitors, accountants or other professional offices with a flat
- Owner-occupied practice with the principal living above
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%
- StrengthLong professional lease covenant
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
How we fund a surgery or professional premises with a flat
For an investment case we size a term loan on the combined professional rent and residential rent at an interest cover ratio of around 125 to 140 percent, to 70 to 75 percent loan to value with a 25 to 30 percent deposit on a 5 to 25 year term at 6.5 to 8.5 percent. An owner-occupier practitioner trading from the premises is tested on business affordability and can reach 6.0 to 7.5 percent. Where a purchase must complete fast or is bought at auction, semi-commercial bridging at about 0.70 to 0.95 percent a month carries it to a term refinance. Where the premises need a clinical fit-out or the flat needs work, light or heavy refurbishment finance funds it, and a conversion of the upper floors to add residential is funded by semi-commercial development finance on a loan to cost and GDV basis. Lenders value a long lease to a sound professional or healthcare covenant, which provides defensible income, alongside a flat that lets readily and ideally has its own access.
Lender appetite for professional premises
A broad field funds surgeries and professional premises with flats, including high street lenders such as NatWest, Lloyds, Barclays and HSBC for strong professional covenants, alongside specialists like Shawbrook, Allica, Cynergy Bank and Cambridge & Counties. Healthcare and professional tenants on long leases are viewed as stable, defensible income, so lenders often compete keenly. The flat above adds a residential strand, and a building with a long professional lease and a lettable flat attracts some of the better terms in the semi-commercial market.
Exit and refinance options
These buildings are typically held long term and refinanced at the end of each term, often onto a semi-commercial remortgage to release equity or improve the rate as the professional lease matures. Where a practitioner is buying their own premises or a building needs adapting for clinical use, semi-commercial bridging can complete quickly and fund the works before a term loan takes over. A long, renewed professional lease can support a particularly competitive refinance given the quality of the income.
Finance structures that suit this sector
- Owner-occupier semi-commercial mortgageWhere the practitioner trades from the premises.
- Semi-commercial investment mortgageWhere a practice leases the ground floor and the flat is let.
- Semi-commercial mortgageCore term loan across the premises and flat.
- Semi-commercial bridgingFast or auction completion before a term refinance.
- Heavy refurbishment financeBring the premises to a clinical standard or refurbish the flat.
- Semi-commercial development financeConvert upper floors to add residential on a loan to cost and GDV basis.
Finance a surgery or professional premises with flat
A view on lenders and likely terms within one working day.
What drives a surgery's numbers
A surgery or professional premises with a flat earns a long professional or healthcare lease income plus a residential rent, giving lenders a secure, defensible blended income. They capitalise the combined rent at a keen semi-commercial yield reflecting the lease strength and stress it at an interest cover ratio of around 125 to 140 percent. The length and covenant of the professional lease are the central inputs, which is why these buildings often attract the better terms in the market.
Indicative surgery and professional premises rates
We arrange semi-commercial mortgages on a surgery or professional premises with a flat from 6.5 to 8.5 percent a year for an investment, and 6.0 to 7.5 percent for a practitioner owner-occupier tested on business affordability, to 70 to 75 percent loan to value with a 25 to 30 percent deposit over 5 to 25 years. A clinical fit-out before a term loan can run on semi-commercial bridging at 8.5 to 11 percent a year.
Frequently asked questions
Can you get a mortgage on a doctors surgery with a flat above?
Yes. A surgery with residential accommodation above is funded by a semi-commercial mortgage, sized on the professional rent and the residential rent together. A long lease to a healthcare or professional tenant tends to support competitive terms.
Are professional premises easier to finance than other semi-commercial?
Often, yes. Healthcare and professional tenants on long leases are seen as stable, defensible income, so high street and specialist lenders alike compete for these buildings, which can keep rates toward the lower end of the semi-commercial range.
Can a practitioner buy their own premises and live above?
Yes. That is an owner-occupier case tested on business affordability, and where you personally occupy the flat the loan can fall under FCA-regulated rules. We are not authorised for regulated lending, so we refer those cases to a regulated firm.
What deposit is needed for professional premises with a flat?
Typically 25 to 30 percent, for a loan to value of 70 to 75 percent. A strong professional lease covenant and a lettable flat can help secure the more competitive end of the available terms.
Financing a surgery or professional premises with flat?
Tell us about the property and we will come back with a view on lenders and likely terms.