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Mortgages for unoccupied commercial properties

Recently a new term product has entered the market, allowing landlords to secure a commercial mortgage against unoccupied commercial properties without using short term finance. For the more experienced landlord, an unoccupied commercial premises could be an opportunity to purchase at a good value, or to remortgage without a tenant. Gareth Richards, commercial consultant, explores how the product works.

When looking at commercial property, there are a number of checks that a potential investor would carry out when assessing whether a property is a suitable investment or not. A key factor is whether the property has a tenant in situ or not. With lenders historically shying away from ‘riskier’ vacant properties, landlords tend to opt for costlier short-term bridging finance to purchase the unit until they can secure a tenant.

Why is it harder to secure a term mortgage against an unoccupied commercial premises?

Firstly, you are heavily restricted by the number of products and lenders who accept unoccupied commercial premises, most prefer that the property is income generating. Lenders prefer the guaranteed income of having a tenant in situ.

Why is the new product different?

The product takes into account outside income, which would cover the mortgage repayments during the property’s unoccupied period. This allows the investor to purchase a commercial property vacant with time to find a tenant and agree lease terms, rather than trying to rush this before completion.

Additionally, it avoids the extra cost and time associated with taking out a bridging product and then having to secure a commercial mortgage once a tenant is in place.

Product Features

  • Rates from 6.05%
  • Fixed rate options available are 2, 3, 4 or 5-year terms
  • Interest Only or Part-Capital - bespoke amortization is available
  • Up to 70% LTV
  • Term loans from 2 years to 25 years
  • Borrowing entity’s- LLPs, Limited company, individuals, Trusts, SPVs, Trading Cos acceptable
  • Min loan of £50,000
  • Arrangement fee: 1.50%


To be eligible for the product, the lender requires certain criteria to be met by the investor and the property.


  • 100% personal guarantee required
  • 2 years relevant sector experience
  • Affordability of the loan is to be demonstrated for the vacant possession period


  • 150% Debt Service Cover Ratio required based on new market rent
  • If no trading history is available, the surveyor’s guidance on management costs will be relied upon

How can I access this product?
If you are looking to purchase a vacant commercial premise and you are looking for finance, it’s important that you discuss your situation with a broker who can find you the right product.

To discuss your potential vacant possession property, or for any other commercial properties, call me at the office on 01732 471627, on my mobile on 07415 506754 or email me on



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