Could semi-commercial property be the next opportunity for landlords?

For many landlords, the biggest challenge today is not simply improving rental yields. It is finding investments that still produce attractive returns whilst making commercial sense in an increasingly demanding regulatory and tax environment.

That is one reason why semi-commercial property has been attracting growing attention, and why today’s announcement from specialist lender LendInvest is likely to be of interest to experienced investors looking beyond traditional buy-to-let.

The lender has launched a new range of semi-commercial buy-to-let mortgage products, with two and five-year fixed rates starting from 5.94%. The products are available to qualifying individual and corporate borrowers, with applications continuing to be processed through specialist mortgage intermediaries.

According to LendInvest, the mixed-use sector now represents around 24% of all commercial lending activity. The lender also reports that applications for semi-commercial finance doubled during 2024 before increasing by a further 58% during the first half of 2025. Retail premises with residential accommodation above account for almost seven in ten applications, suggesting that this is becoming an increasingly established asset class rather than a niche investment.

For many Property118 readers, however, the financing announcement is only part of the story.

Lower acquisition taxes can materially improve investment returns

One of the most overlooked advantages of semi-commercial and mixed-use property is the considerably lower purchase tax payable compared with residential investment property.

Provided a transaction genuinely qualifies as mixed-use or non-residential, purchasers benefit from the commercial land transaction tax rates rather than the often much higher residential rates and surcharges.

The current rates are:

Purchase price	England SDLT	Scotland LBTT	Wales LTT
Up to £150,000	0%	0%	0%
£150,001 to £225,000	2%	3%	0%
£225,001 to £250,000	2%	3%	1%
£250,001 to £1,000,000	5%	5%	5%
Over £1,000,000	5%	5%	6%

As with residential property taxes, these rates are progressive, meaning each percentage only applies to the portion of the purchase price within that band.

For investors acquiring larger assets, the savings compared with purchasing an equivalent residential portfolio can be substantial, leaving more capital available for refurbishment or further acquisitions.

Looking beyond traditional buy-to-let

Semi-commercial investments are not suitable for everyone. They require careful due diligence, different lending criteria and an understanding of both commercial and residential tenancy arrangements.

On the other hand, many experienced landlords find they can offer attractive cashflow, longer commercial leases, diversified income streams and, in some cases, significantly lower acquisition costs.

As increasing numbers of investors reassess the future direction of their portfolios, mixed-use property is likely to become an increasingly important part of the conversation.

The key question is not whether every landlord should invest in semi-commercial property. Rather, it is whether your current portfolio is still the best place for your equity to remain over the next ten or twenty years.

If you are reviewing your long-term investment strategy, retirement plans or considering whether restructuring your portfolio could improve cashflow and future flexibility, a one-to-one Property118 consultation can help you explore the options available and assess whether opportunities such as semi-commercial investment deserve a place in your future plans.