Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

UK Semi-Commercial Lending Set to Exceed £1bn in 2026

UK semi-commercial mortgage lending is on track to surpass £1bn in annual volumes for the first time in 2026, according to research from Tab. The growth is attributed to rising borrower demand, increased lender competition, and an expanding range of mortgage products.

Tab’s latest Mixed-Use Mortgage Monitor estimated that total semi-commercial lending in the UK reached approximately £242 million in the second quarter of 2026, up from £201 million in the same period of 2025. Transaction volumes also rose by 13% year-on-year, with completions increasing from around 415 in Q2 2025 to 470 in Q2 2026. The average loan size grew by roughly 6%, from £484,000 to £515,000 over the same period.

The report highlighted that the number of active lenders in the sector increased from 25 to 28 in the past year. Product availability also expanded, with nearly 20% more dedicated semi-commercial and mixed-use mortgage products, reaching a total of 94. Average loan-to-value (LTV) ratios rose from 64% to 67%.

Tab’s research found that liquidity remains strong for well-structured applications, particularly those with 70% LTVs, diversified income streams, and experienced borrowers. Despite higher borrowing costs, average headline fixed rates fell to 6.7% after peaking at 6.85% in the first quarter of 2026.

The report noted that specialist lenders are increasingly filling the gap left by high street banks, which have scaled back on complex commercial lending. The sector is also attracting more residential property investors seeking to diversify their portfolios into mixed-use finance.

Tab expects the semi-commercial lending market to continue growing in the second half of 2026, supported by challenger banks and specialist lenders developing new products, including those that combine bridging and term finance.

For UK letting agents and inventory clerks, these trends may signal increased activity in the mixed-use property sector, with more investors and landlords seeking opportunities in semi-commercial assets.