Mortgage guide
Is a commercial property worth more with a tenant?
Yes, a commercial property is generally worth more with a tenant in place, particularly if that tenant is financially strong and on a long-term lease. The presence of a reliable tenant means the property generates stable, predictable income, which makes it more attractive to both investors and lenders.
- Published
- 4 Aug 2026
- Last reviewed
- 4 Aug 2026
- Reading time
- 3 min
Is a commercial property worth more with a tenant?
Yes, a commercial property is generally worth more with a tenant in place, particularly if that tenant is financially strong and on a long-term lease. The presence of a reliable tenant means the property generates stable, predictable income, which makes it more attractive to both investors and lenders.
The value of a tenanted commercial property on a commercial mortgage is often based on its rental yield, the annual rental income in relation to the property’s value. When valuing investment properties, surveyors frequently use the investment method, which considers rental income, lease length, and tenant covenant strength. A blue chip tenant such as a major retailer, bank, or national brand adds considerable value, as they are seen as low-risk and more likely to meet their lease obligations long term.
Leases with no break clauses and long unexpired terms further increase a property’s value. A long lease without the risk of early termination gives the buyer greater income certainty, which directly enhances the asset’s appeal and market price. In contrast, vacant properties or those with short or uncertain lease terms are often valued lower due to income risk and the potential cost of finding new tenants.
In short, a commercial property let to a blue chip tenant on a long, secure lease without break clauses is typically worth significantly more than a vacant property or one with an unstable tenancy.
Commercial mortgage calculator
Choose owner occupier for a business buying or refinancing premises it trades from, assessed on adjusted net profit before tax from the latest accounts, or investment for property let to tenants, assessed on lease income.
Commercial mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Max Loan to Value (LTV) | 80% LTV Care Home Mortgages, 100% LTV Medical Commercial Mortgages, 75% Commercial Investment |
| Max Term | Up to 40 years |
| Completions | From 4 weeks |
| Repayment options | Capital repayment and Interest only |
| Commercial mortgage rates | From 6.19% |
| Rate options | Variable, Base Rate Tracker, 2, 3 or 5 year fixed mortgage options |
| Valuation methods | Going concern/Investment (Market value 1, MV1), MV2, MV3 or bricks and mortar |
| Flexible Leases | Rolling leases, weak covenants and short time remaining accepted |
| Adverse credit | Accepted on some products on a case by case basis |
| Locations | Available in England, Scotland, Wales and Northern Ireland |
| Experience | Not required on certain products |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Max Loan to Value (LTV) | 65% |
| Product fee | 5% (4.74% for existing customers) |
| Fixed rate (5 years) | 6.34% |
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Frequently asked questions
What is a bridging loan for commercial property?
A bridging loan for commercial property is a short-term, property-backed loan used to purchase, refinance, or stabilise commercial or mixed-use assets when a commercial mortgage is not immediately available. It is exit-driven, typically capped around 75% loan-to-value, and repaid through sale or refinance rather than ongoing affordability.
Can you get a mortgage above a commercial property?
Yes, you can get a mortgage on a property above a commercial unit, but it is classed as mixed-use or non-standard. Lenders assess the type of business below, access arrangements, lease terms, and resale risk, with fewer lenders and in some cases higher deposit requirements than standard residential properties.
Can I use my pension as a deposit on a commercial property?
Yes, in three ways within the pension rules. Any other withdrawal, including a loan to you, is an unauthorised payment, taxed heavily. From the minimum pension age, usually 55 but 57 from 6 April 2028, you can take benefits and spend the cash, normally up to 25% tax free, with the rest taxed as income (gov.uk: tax-free lump sums). The scheme can instead buy the property, using its own funds as the deposit and borrowing up to 50% of its net assets, and let it to your business at a market rent. A small self-administered scheme (SSAS) can also make a loanback to its sponsoring company, secured by a first charge on another asset. A financial adviser authorised to advise on pensions can say which route suits you.
What loan-to-value can I get on a commercial equestrian property?
Each lender sets its own loan-to-value for commercial equestrian property such as livery yards, riding schools and competition yards, lending against a component valuation of the land, buildings, dwelling and any trade. The planning position, the strength of the accounts and the operator's experience move the figure. Farms and agricultural holdings with equestrian use are funded on agricultural or rural lending, and bare land on land lending, each at the lender's own limits, so an adviser checks current criteria for the specific property.
Can you get a 90% commercial mortgage?
Yes, 90% loan-to-value commercial mortgages are possible, but only in limited sectors such as healthcare properties, pharmacies, or certain convenience stores with strong trading history. For most other commercial properties, maximum lending is typically capped at around 70% to 75% LTV.
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