Mixed Use Development Finance
Mixed use development finance funds schemes combining residential with commercial floorspace — flats over shops, offices with apartments above, or larger regeneration blocks — to 60%–65% of gross development value and up to 90% of cost, at roughly 7%–11% per year. The complication is not the funding structure but the valuation: the residential element is valued on comparables and the commercial on yield, so lenders will discount unlet commercial space heavily and may assume a bulk sale on the flats. Schemes where the commercial floorspace is pre-let, or deliberately kept small, get materially better terms than schemes carrying speculative retail.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Loan to GDV
- Up to 65%; 60% where commercial exceeds 30% of GDV
- Loan to cost
- Up to 90%, including 100% of build costs
- Rate
- 7% – 11% per year, rolled
- Loan size
- £500,000 – £30m
- Term
- 12 – 30 months
- Arrangement fee
- 1.5% – 2%; exit fee 1% – 2%
- Commercial element
- Pre-let preferred; speculative space valued cautiously
- Drawdowns
- Monthly in arrears against monitoring surveyor sign-off
- Exit
- Unit sales, investment refinance, or a combination
Worked example — 12 flats over two retail units
- Site purchase
- £950,000
- Build cost
- £2,750,000
- Total cost with fees and finance
- £4,150,000
- Residential GDV (12 units)
- £4,200,000
- Commercial GDV (two units, one pre-let)
- £1,150,000
- Total GDV
- £5,350,000
- Facility at 63% LTGDV
- £3,370,000
- Developer equity
- ≈ £780,000
- Exit
- Flats sold; retail retained and refinanced onto a commercial mortgage
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the scheme, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- Detailed planning consent for the mixed scheme as drawn
- A build contract with a contractor experienced in the relevant construction type
- Two prior comparable schemes delivered by the developer or the appointed team
- Equity of 10%–20% of total cost committed ahead of the first drawdown
- A commercial letting strategy, or an accepted assumption of a discounted bulk sale
This is the wrong product if
- Schemes where speculative retail makes up the majority of the value
- Sites held on an option or subject to unresolved planning conditions
- Developers with no delivery history on comparable construction
- Appraisals where profit on cost falls below roughly 15% before contingency
What actually happens, and when
- Week 1
Appraisal review
We separate residential and commercial value, test the yield assumption on the commercial element and confirm the scheme still works if the retail lets slowly.
- Week 1–2
Terms
Terms from lenders that genuinely underwrite mixed use — many development desks are residential-only in practice, whatever the brochure says.
- Week 3–5
Valuation and QS
Red Book valuation on both elements, plus an initial QS report on costs, programme and contingency.
- Week 6–8
First drawdown
Legals complete, land funded, and build drawdowns begin monthly in arrears.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.