Ground Floor Shop with Two Upper Flats in Cheltenham
£485,000 · 20 years · 6.55% fixed 5 yrs. A property investor was purchasing a Victorian mixed-use building in Cheltenham comprising a ground-floor independent café on a five-year lease and two one-bedroom flats above...
The Client
Property investor
The Challenge
A property investor was purchasing a Victorian mixed-use building in Cheltenham comprising a ground-floor independent café on a five-year lease and two one-bedroom flats above on ASTs. Semi-commercial mortgage underwriting requires assessment of both the commercial and residential elements, and most residential BTL lenders will not consider the application.
Our Solution
Doulton placed the mortgage with a specialist semi-commercial lender assessing the blended rental income from all three units. The café lease, with a solid local operator, added stability to the income profile. Both flats were fully tenanted. The blended yield across all three units was 7.2%.
The Outcome
Building purchased as a single investment. All three units tenanted from day one. The blended income profile - commercial lease plus residential ASTs - provided income diversification rarely available in a single residential asset. Key highlights: Semi-commercial lender assessed blended income across all 3 units; Commercial café lease added income stability; Blended gross yield of 7.2% across the whole building.
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