Mortgages
Above a Shop
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Buying a flat above a shop can be an excellent way to get on the property ladder, often at a lower purchase price than a standard residential property. However, many buyers quickly discover that getting a mortgage on a property above commercial premises is far more complicated than expected.
High street banks regularly decline these properties, not because the buyer is unsuitable, but because the property falls outside standard lending criteria. This is where specialist mortgage advice makes a real difference.
At Drummonds Finance Group, we regularly help clients secure mortgages on flats above shops, including properties above takeaways, restaurants, hair salons and other commercial units.
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Why mortgages above shops are more difficult
Lenders assess risk differently when a property sits above or next to a commercial unit. Common concerns include noise, smells, fire risk, long-term marketability and resale demand.
Some lenders have blanket rules that automatically decline any property above commercial premises. Others will consider it, but only if very specific criteria are met.
This often leads buyers to believe the property is un-mortgageable, when in reality it simply needs the right lender and the right approach.
How we approach mortgages above shops
We start by reviewing the property itself, not just your income or credit profile. This includes the type of shop, access arrangements, lease length and layout.
We then identify lenders whose criteria align with the property, before a full application is submitted. This reduces the risk of unnecessary declines and avoids wasted valuation fees.
Only once the lender is comfortable with the property do we move forward with a full mortgage application, keeping you informed at every stage.
Flats above takeaways and hot food outlets
Flats above takeaways are one of the most commonly declined property types by mainstream lenders. Concerns usually focus on cooking smells, grease extraction, late opening hours and fire risk.
That said, not all takeaways are treated the same. Some lenders will consider these properties where there is good separation between the commercial unit and the flat, proper ventilation systems in place and a suitable lease structure.
We assess each case individually and approach lenders who are known to consider flats above takeaways on a case by case basis.
What lenders look for
While every lender is different, the factors below play a big role in whether a mortgage is possible.
A separate residential entrance is one of the most important considerations. Lenders strongly prefer flats that do not share access with the commercial premises.
Lease length is another key factor. Most lenders want a minimum of 85 years remaining on the lease at the time of application.
Valuers will assess noise levels, smells, opening hours and the overall condition of the building. If the property is considered marketable and desirable to future buyers, options improve significantly.
The type of commercial unit matters. Offices, salons and retail shops are usually viewed more favourably than hot food outlets, although exceptions do exist.
Can first-time buyers get a mortgage above a shop?
Yes, first-time buyers can get a mortgage on a flat above a shop, but lender choice is crucial.
Some lenders impose tighter criteria for first-time buyers, particularly where the property is non-standard. Deposit requirements can be higher, and affordability is assessed carefully.
With the right advice, many first-time buyers successfully purchase flats above shops, particularly in town and city centres where this type of property is common.
Buy-to-let mortgages above shops
Buy-to-let mortgages above commercial premises are often more achievable than residential mortgages, depending on rental demand and property layout.
Lenders will look closely at rental yield, tenant demand and the long-term lettable of the property. Flats above shops in busy locations can perform very well as rental investments when financed correctly.
Why a specialist mortgage broker matters
The biggest mistake buyers make with flats above shops is applying to the wrong lender first. A decline can complicate future applications and waste valuable time.
As a specialist mortgage broker, we know which lenders are comfortable with mixed-use properties and which will decline outright. We also know how to package the application so the underwriter and valuer see the property in the best possible light.
This often makes the difference between a decline and an approval.