Commercial Mortgages

“The term commercial mortgage describes the finance that is required for the purchase of a commercial property. Commercial properties describe a number of different properties not used for residential accommodation.”

Commercial Mortgage Property Types:

a) Retail – shops and shopping centres

b) Pubs

c) Restaurants and Bars

d) Warehouses

e) Light industrial units

f) Offices

g) Nurseries

h) Care Homes

i) Schools

j) Leisure centres/ Sports fields

k) Care homes and retirement villages

l) Doctor’s surgeries/ Dental surgeries and Veterinary practices

m) Student accommodation

n) Guest houses

o) Hotels

Commercial Property Purchase:

You can purchase commercial properties in a number of different ways: in your personal name; in a company’s name; or as an SPV (Special purpose vehicle) specifically set up to purchase the property. It is important to understand that the manner in which you choose to hold the property will have legal and accountancy ramifications.

If you would like help in this regard please contact us on 0800 7723180. (This is our free phone number and) We would be delighted to recommend a legal advisor or accountant who can help you understand the tax and legal implications associated with purchasing the property in a particular way.

Costs:

Commercial loans tend to be more expensive than standard mortgages. Lenders will also look at ensuring that the rental income from any lease is sufficient to cover the interest payments, plus a margin. This is to ensure that any fluctuations in rate, void periods, and general costs can be covered. Some lenders will require that the property is already rented out. Other lenders may take a view and work off market rental values that are reported by the valuer.

If you can’t find a solution that works for you on the site please call or email us and we can see if we can help you further. Alternatively please send us an email to info@pitch4.com

An office for your business:

Commercial mortgages can also be used if you are looking to purchase a property as an office for your business. This is referred to as an owner-occupied commercial mortgage. If you are looking at renting a commercial property out to an independent third party this is often referred to as a commercial investment mortgage.

Associated costs to consider:

There are a number of costs to be considered when purchasing a commercial property. These include, but are not limited to, the following:

a) Legal costs of purchase and sale.

b) Valuation fees.

c) Business rates during periods when the property is not rented out.

d) Business insurance.

e) Repair work / required to be undertaken under the terms of the lease.

f) Annual checks and certifications.

g) Ongoing service costs.

h) Ground rent if not a freehold.

i) Legal costs on a new lease.

j) Estate agency fees.

Pitch 4 Finance Budget template:

If you would like a budget template which you can use to help you budget your costs please email us here at info@pitch4.com ref:  Commercial Property budget planner.

Please call us on 0800-7723-180 or email us at info@pitch4.com