"Navigating the commercial and semi-commercial mortgage market requires expertise. These transactions differ from standard residential lending in numerous ways, including the evaluation of property use, location, resale potential, turnover, and profitability"
- Donna Francis - Envelop
In any evolving business sector, discussions often centre on future trends and emerging opportunities. This is particularly true for the UK property market, where attention has frequently shifted toward more specialist areas in more recent times. As the UK economy transforms, so too do the strategies of homebuyers and property professionals navigating an increasingly complex lending landscape.
Experienced property professionals have shown remarkable adaptability in the current higher interest rate environment, leveraging their accumulated knowledge to identify opportunities and diversify their portfolios. For many, this includes exploring the growing potential of commercial and semi-commercial properties, an area increasingly recognised as a profitable and future-proof investment.
The rise of commercial and semi-commercial conversions
Recent data highlights the rising demand for such property types, with a 63% increase in change-of-use applications from commercial to residential properties in England between 2021 and 2023. This is according to a recent analysis from Direct Line, which suggested that planning approvals for these conversions rose by 60% during the same period, with 2024 on track to see an additional 20% increase.
This surge reflects shifting market dynamics. The undersupply of housing in England, combined with the rise of remote working and the retail sector’s migration online, has left many commercial properties underutilised. Converting these spaces into residential units or mixed-use properties offers landlords attractive revenue opportunities, long-term stability, and diversified income streams.
London has been at the forefront of this trend, with boroughs like Haringey (a 100% increase in applications), Enfield, Croydon, and Hackney leading the way.
Meanwhile, regions such as Somerset (90% increase), Wakefield (70%), Bristol (68%), and Sheffield (58%) are also seeing significant growth in planning approvals.
Why specialist advice matters
Navigating the commercial and semi-commercial mortgage market requires expertise. These transactions differ from standard residential lending in numerous ways, including the evaluation of property use, location, resale potential, turnover, and profitability.
Each lender has unique criteria, policies, and product offerings, which can complicate the process for landlords, investors and developers unfamiliar with the nuances of this particular market.
A specialist adviser adds significant value by:
· Understanding lender policies: Specialists know which lenders are best suited for specific cases and how to meet their requirements. It’s also the case that many specialist products are only available through intermediary channels
· Packaging applications effectively: Understanding the exacting nature of documents required by individual lenders and how to best package all this relevant information so that applications are accepted. Properly prepared applications save time and increase approval likelihood. Not to mention in supporting these cases right through to completion.
· Navigating complex cases: By tailoring solutions to fit unique business plans and objectives, specialists help streamline and simplify the lending process.
· Providing end-to-end support: From application to completion, specialists ensure smooth transactions, freeing landlords and developers to focus on their projects rather than the financing.
An increasing number of landlords, investors, and developers are seeking specialist advice to embrace emerging trends and navigate the complexities of niche sectors. In an environment shaped by inflationary pressures, rising interest rates, and economic uncertainty, expert guidance is more critical than ever to identify and seize new opportunities.
With the right support, investors can still tap into the growing potential of commercial and semi-commercial properties to achieve long-term stability and success.
