| Max LTV | Up to 70% |
|---|---|
| Rate from | 4.5% p.a. |
| Term | 10–25 yrs |
| Min Loan | £100,000 |
Owner-Occupier vs Investment Office Finance
Owner-Occupier Office Mortgage
If your business will occupy the office, you qualify as an owner-occupier borrower. Lenders treat this positively - you have a direct stake in maintaining the property and the business. LTV can reach 70–75% with the right lender. Most high street banks will consider trading businesses with two or more years' accounts. Newer businesses can access the market through challenger or specialist lenders.
Investment Office Mortgage
Purchasing an office to let to third-party tenants is assessed differently. The lender underwrites primarily on rental income - typically requiring a rental cover of 125–135% of monthly interest at a stressed rate. The strength of the tenant's covenant (a FTSE 100 company on a 10-year lease is very different from a startup on a rolling contract) has a significant bearing on the rate and LTV available.
Rates and LTV for Office Mortgages
| Scenario | LTV | Rate (p.a.) | Notes |
|---|---|---|---|
| Owner-occ, prime location | Up to 70% | 4.5–5.5% | Strong accounts, good credit |
| Owner-occ, secondary location | Up to 65% | 5.0–6.5% | Depends on business strength |
| Investment, long lease | Up to 65% | 5.0–6.5% | Strong tenant covenant preferred |
| Investment, short / rolling lease | Up to 60% | 6.0–8.0% | Specialist lenders only |
| SSAS/SIPP purchase | Up to 50% | 5.5–7.0% | Specialist commercial lenders |
Planning and Use Class Considerations
Office property in England falls under Use Class E (Commercial, Business and Service), which permits a range of uses without needing planning permission for change between them. This flexibility is valued by lenders as it widens the pool of potential future occupiers. Lenders become more cautious about specific-use conversions (for example, a laboratory or data centre) where re-letting would be difficult.
Buying Your Office Through a Pension (SSAS or SIPP)
Small Self-Administered Schemes (SSAS) and Self-Invested Personal Pensions (SIPP) can purchase commercial property, including offices occupied by the scheme member's own business. The business pays rent to the pension scheme - a tax-efficient arrangement. LTV is typically limited to 50% of the property value. We work with specialist lenders experienced in pension property finance.