The five core requirements
- Deposit / LTV: 25%–40% of property value as deposit.
- Company financials: 2–3 years filed accounts showing profitability.
- DSCR test: Net Operating Income covers 125%–140%+ of annual debt service.
- Personal guarantees: from directors with 20%+ shareholding.
- Property suitability: use class, condition, environmental status, lease structure (if investment).
Detailed deposit and LTV requirements
| Property type | Max LTV | Min deposit |
|---|---|---|
| Offices, light industrial, warehouses | 70%–75% | 25%–30% |
| High street retail | 65%–70% | 30%–35% |
| Pubs, restaurants | 60%–65% | 35%–40% |
| Hotels, B&Bs | 60%–65% | 35%–40% |
| Care homes | 60%–70% | 30%–40% |
| HMO/semi-commercial | 70%–75% | 25%–30% |
Financial documentation needed
- Last 2–3 years' filed company accounts.
- Last 12 months' management accounts.
- Last 6 months' business bank statements.
- VAT returns (most recent quarter).
- Aged debtor/creditor reports.
- Director CVs and ownership structure.
- Personal bank statements for guarantors (3–6 months).
- Personal asset and liability statements.
Business plan for owner-occupier cases
If you're buying premises for your business to occupy, the lender wants a business plan covering:
- Why you're buying (vs continuing to rent).
- Existing trading position and forecasts.
- How the property fits operational needs.
- Rent saving vs new mortgage cost.
- Sensitivity analysis (revenue down 20%, can you still service debt?).
Property due diligence
- Valuation: commercial RICS valuation by lender-approved surveyor (£1,500–£5,000+).
- Environmental search: contamination history check (Phase 1 environmental report often required).
- Planning compliance: confirmation property has valid permitted use and any extensions are properly consented.
- Energy Performance Certificate: minimum E rating for letting (MEES regulations).
- Asbestos register: for commercial properties built pre-2000.
- Fire risk assessment: commercial properties must comply with RRO 2005.
Lease structure (investment commercial)
For investment commercial purchases, lender scrutinises:
- Lease length remaining (5+ years preferred).
- Rent review structure (upward-only preferred).
- Tenant covenant strength (rated companies preferred).
- FRI (Full Repairing and Insuring) lease vs IRI vs Internal-only.
- Break clauses and how they affect rental certainty.
Rate landscape 2026
- 65% LTV owner-occupier office/industrial: 6.50%–7.50% on a 5-year fix.
- 65% LTV investment commercial: 7.00%–8.00%.
- Specialist sectors: 7.50%–8.50%+.
- Commercial bridging: 0.55%–0.85%/month (6.6%–10.2% annualised).
- Arrangement fee: 1.5%–2% of loan, usually addable to balance.
UK commercial mortgage lenders
- Allica Bank, Cambridge & Counties Bank, Shawbrook, OakNorth.
- Together Money, InterBay, Aldermore, Hampshire Trust Bank.
- Lloyds Commercial, NatWest Commercial, HSBC Commercial Banking.
- Specialists: Metro Bank (hospitality), Castle Trust (refurb), United Trust Bank.
Pros
- Multiple UK lenders compete for commercial business.
- Owner-occupier commercial gives long-term cost certainty vs rent.
- Interest fully deductible against business profit.
- Capital appreciation belongs to the business.
- Rental income from investment commercial can be strong.
Cons
- Deposit requirements 25%–40%.
- Personal guarantees almost always required.
- Underwriting timeline 8–14 weeks.
- Commercial valuation and legal costs significant.
- Start-ups face very limited lender appetite.