Seeing the opportunity in semi-commercial property

Once the beating heart of local communities, the British high street has seen a steady decline in recent years. Shifting consumer habits, economic pressures, high business taxes and the rapid rise of online shopping and services have all taken their toll on bricks-and-mortar stores, resulting in more stores closing than opening.

Luckily, there is cause for cautious optimism. A PWC report confirmed that the rate of net shop closures stabilised in 2024. Some types of business, particularly convenience stores and coffee shops, saw a net increase in outlets. The high street appears to be adapting.

Furthermore, property professionals are once again seeing high street property - typically shops with flats above - as a shrewd investment. Our team has seen enquiries for bridging and short term buy to let loans for semi-commercial properties increase significantly in 2025 - up 40% in January to April this year compared to the same period last year. 

Nearly half of these enquiries were to facilitate the purchase of new semi-commercial property. A key advantage of purchasing semi-commercial property is that the stamp duty land tax (SDLT) is payable at the commercial rate rather than the residential rate. With a maximum rate of 5%, this can represent a significant saving for properties over £250,000.

Another attraction of mixed-use properties for landlords is the dual income streams which can make them more resilient in a fluctuating market. With the ongoing uncertainty around the implications of the Renters Reform Bill for residential landlords, it’s not surprising that more landlords are investigating portfolio diversification.

From a funding perspective, bridging finance can be very useful for the purchase of semi-commercial property. Bridging lenders typically deliver funds quickly, allowing investors to move at speed to take advantage of attractively-priced opportunities, including at auction. Bridging facilities also often permit - and even fund - property improvements, which enable landlords to charge higher rents and increase their yields. Property developers can also use bridging funding to convert mixed-use properties into fully residential ones.

It may surprise you to hear that semi-commercial bridging finance can be highly competitively priced. At Funding 365, we include semi-commercial property where the commercial element is up to 30% of the property value in our residential bridge product, which features interest rates from just 0.69% per month. What’s more, we fund refurbishment with a cost of works up to 40% of the day one value at the same interest rates. View our Residential Bridge product guide here.

For landlords looking to diversify their portfolios and property developers looking to repurpose vacant units, there are clear opportunities in semi-commercial property. Funding 365 is proud to be at the forefront of providing rapid and affordable funding to help invigorate and rejuvenate our high streets.