Semi-Commercial Mortgage Portsmouth
Single-facility finance for property where the residential element is at least 40% of total floorspace: the shop-with-flat archetype that defines Portsmouth's inner parades and post-Class E permitted-development upper floors. Up to 75% loan-to-value, blended cover around 145%, interest rates 6.5 to 8.5% pa, 5 to 25 year repayment terms. Active across Albert Road, Osborne Road Southsea, Cosham High Street and Commercial Road upper-floor reshuffles.
LTV
Up to 75%
Rate
From 6.5% pa
Term
5 to 25 years
Blended cover
~145%
Defining mixed-use property: when does semi-commercial pricing apply?
Semi-commercial finance is a single facility funding mixed-use property, typically a commercial unit on the ground floor with one or more self-contained residential flats above. Where the residential element is at least 40% of total floorspace, semi-commercial pricing applies (instead of pure commercial investment pricing). Where residential is below 40%, lenders treat it as commercial investment and price accordingly.
The lending test combines the commercial rent and the residential AST income on a blended basis, with a typical cover requirement around 145%. Lenders take comfort from the residential security: a flat above is easier to re-let than a vacant retail unit if the commercial side falls vacant, so semi-commercial routinely prices 50 to 100bps inside pure commercial investment. Loan-to-value to 75% is achievable on standard Portsmouth archetypes via specialist desks; Portsmouth valuers can trend conservative on the commercial slice on secondary North End and Eastney parades where retail rents have been volatile, which sometimes caps the achievable LTV below the headline.
Specialist lenders dominate this market. InterBay Commercial (OSB Group) and Shawbrook are the two most active named desks; LendInvest and Cynergy Bank also run active programmes for Portsmouth semi-commercial deals between £200K and £2.5M. Hampshire Trust Bank (locally engaged on Portsmouth deals), HTB, Allica Bank and Together engage actively across the South Coast on semi-commercial parade stock. Limited company SPV structures are standard; individual investor and LLP variations are equally accommodated.
Regulation matters here. Most semi-commercial lending is unregulated commercial: the borrower is a limited company or investor, the residential flats are let on ASTs to third parties. The exception: where the borrower (or an immediate family member) will personally occupy one of the flats, the deal can fall into FCA-regulated mortgage rules and routes to a regulated commercial lender. Stamp duty land tax follows non-residential rates on the whole property where commercial use is genuinely incidental, which is materially cheaper than residential SDLT and is part of why investors favour the structure. Indicative case seed: an Albert Road parade unit with three flats above at £640K, blended rent £42K pa, structured at 70% LTV (£448K facility) with InterBay Commercial or Shawbrook at around 7.0% pa.
Underwriting steps for a Portsmouth shop-and-flats deal
1. Tenancy and split review
We check residential and commercial floorspace split, leases on the commercial side, ASTs on the residential side, tenant covenant on each.
2. Indicative terms in 48 hours
Three to four specialist semi-commercial lenders quoted: interest rate, loan-to-value, term, fees.
3. Credit pack
Lease pack, AST pack, property file, borrower SPV (or individual) pack. InterBay Commercial and Shawbrook want clean tenancy evidence.
4. RICS Red Book valuation
Separates commercial value, residential value and total. Estimated rental value on the commercial unit important to the cover test.
5. Credit approval
Specialist desks typically approve in 1 to 2 weeks post-valuation.
6. Legal completion and SDLT
Standard mixed-use conveyancing. Stamp duty at non-residential rates applies on the whole. 3 to 5 weeks typical.
Buyer profiles for the Portsmouth shop-with-flat archetype
- Investors buying classic shop-with-flat-above stock on Albert Road, Osborne Road Southsea and Cosham High Street
- Commercial Road upper-floor reshuffles post-Class E permitted-development where retail ground floor sits beneath converted residential
- Limited company SPV landlords refinancing Portsmouth semi-commercial holdings off maturing 5-year fixes
- Portfolio investors with a mix of pure commercial and semi-commercial assets across the PO postcodes
- Portsmouth F&B operators with owner-occupier flat above (where the operator lives in the flat)
- Mixed-use conversion deals where consent is for ground-floor retail plus three to six flats above (Albert Road, Commercial Road and the Southsea inner parades)
- First-time semi-commercial investors moving up from a residential buy-to-let portfolio
- Retiring landlords selling individual semi-commercial assets to incoming Portsmouth portfolio investors
Active Portsmouth semi-commercial parades and lender behaviour
Semi-commercial is a deep, active product across Portsmouth, sharpened further by the city's post-2020 Class E permitted-development reshuffles where upper floors over retail have flipped from B-class office to C3 residential, putting fresh semi-commercial stock on the market. The classic inner parades, Albert Road in PO4, Osborne Road in PO5, Cosham High Street in PO6, and the Commercial Road upper-floor stock in PO1 post-Class E PD reshuffles, run on shop-with-flat-above formats backed by exceptionally durable residential demand from the c. 28,000-student University of Portsmouth, the c. 5,000-strong Royal Navy and BAE Systems defence cluster, and the Queen Alexandra Hospital NHS workforce. Lot sizes are typically £300K to £950K for a single parade unit, often £1.2M+ for a four-unit run with multiple flats above. Gross blended yields run wider than the regional UK average given Portsmouth's exceptionally renter-heavy stock: typically 7.0 to 8.5% blended in PO4 and PO5, slightly wider in PO2 North End and PO6 Cosham. The Southsea inner sub-market is distinctive: independent F&B and student-led retail sit alongside high-demand HMO and student residential lets, producing reliable blended income. Recent change-of-use cases (Albert Road Class E cafe conversions with extraction flues, Commercial Road sub-division applications splitting Class E ground from C3 upper, the live 26/00342/FUL Southsea sub-division case retaining office and adding second-floor residential) are typical Portsmouth semi-commercial profiles. Lender appetite is strong: InterBay Commercial, Shawbrook, LendInvest and Cynergy Bank all actively quote on Portsmouth semi-commercial deals; Hampshire Trust Bank, HTB, Allica Bank, Foundation Home Loans and Together engage actively across the South Coast.
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