Quick answer
Lending on semi-commercial property, such as a shop with a flat above, reached £250m in the third quarter of 2026, according to TAB's Mixed-Use Mortgage Monitor. That is up 3% on the second quarter and 14% on a year earlier, though growth slowed from 20% in Q2. Thirty lenders are now active, up from 25 at the start of 2025, with two arriving in Q3, and the number of products rose from 94 to 99. Rates have not fallen with Bank Rate: the average fixed rate was 6.65%, and the gap over Bank Rate has widened to 2.9 percentage points. For buyers, there is more choice, but pricing follows swap rates more than base rate.
What the Q3 figures show
TAB, a specialist lender, tracks the term lending market for mixed-use property each quarter. Its Q3 2026 figures, reported by Bridging & Commercial on 14 October, show:
- Lending: £250m in Q3, up 3% on Q2 and 14% on a year earlier. That is a run rate of about £1bn a year.
- Lenders: 30 active, up from 25 at the start of 2025. Two entered in Q3 and none left.
- Products: 99, up from 94.
- Average loan: £510,000, down 1%.
- Average fixed rate: 6.65%, down from 6.7% in Q2.
- Average loan to value: 66.5%, down from 67%, with some lenders offering up to 75%.
In the previous edition, published in July, TAB recorded about £242m of lending in Q2 with 28 active lenders, and said it expected the market to pass £1bn in 2026, as reported by Property Reporter. TAB's chief executive, Duncan Kreeger, said two of the new lenders were "rooted in bridging", and that "these lenders want to keep hold of borrowers when they refinance away from bridging loans".
Why rates have not followed Bank Rate
Bank Rate stayed at 3.75% throughout the quarter, 25 basis points lower than a year earlier. Yet the average semi-commercial rate is 10 basis points higher than a year ago, and the gap between the two has widened from 2.55 to 2.9 percentage points. Kreeger said "semi-commercial pricing follows wholesale funding costs more closely than the Bank of England's headline rate". Two-year swap rates rose above 4.7% in September, and TAB expects specialist lenders to reprice upwards, reversing some of the summer's cuts of up to 75 basis points.
Our report on the September Bank Rate decision explains how market rates feed into lending. The practical point: if a term loan will repay your bridge, test the numbers at today's rates, not at the rates you hope for.
Valuers are cautious on commercial space
The monitor also points to valuations. Kreeger said "valuers are taking a cautious view of commercial space in some locations", and that lower expectations for secondary retail rents matter for typical mixed-use buildings with a shop on the ground floor. That is one reason the average loan to value has edged down. Our commercial property report shows capital values fell 0.9% across the market in Q3, although retail held up better than offices and industrial.
For a mixed-use purchase, that means the commercial part may be valued conservatively, especially if it is empty or on a short lease. A signed lease with a good tenant helps both the valuation and the refinance.
What it means for mixed-use buyers
- Bridging to buy or improve. Semi-commercial bridging funds purchases that need to move quickly, such as at auction, or where the shop is empty or the flats need work.
- Bridge to term. With more bridging lenders offering term loans, a bridge to term agrees the longer-term loan with the same lender from the start.
- Converting or building. If you are adding flats above a shop or building a mixed-use scheme, see mixed-use development finance.
- Changing the use. Turning the commercial part into homes may be possible under permitted development. See commercial to residential finance.
Our guides to commercial mortgages and how commercial mortgage rates are set explain the term loans that usually repay a mixed-use bridge. Instant Quotes shows which semi-commercial lenders on our panel fit your deal.
Common questions
How much semi-commercial lending was there in Q3 2026?
TAB's Mixed-Use Mortgage Monitor recorded £250m in Q3 2026, up 3% on Q2 and 14% on a year earlier, with 30 active lenders.
What is semi-commercial property?
A building that is part commercial and part residential, such as a shop, café or office with flats above. Lenders also call it mixed-use.
Why are semi-commercial rates higher than a year ago?
Lenders price mainly from their own funding costs, such as swap rates, rather than Bank Rate. Swap rates rose in September, so the average rate is slightly higher than a year earlier.
Can a bridge on a mixed-use property become a term loan?
Yes. Some lenders offer a bridge that converts into a term loan with the same lender once the works or letting are done, known as bridge to term.
This article reports news and published figures as at 15 October 2026. It is for general information only and is not legal, tax or financial advice. Bridge & Build Finance is a commercial finance brokerage service, not a lender. Finance is subject to status, lender criteria, valuation, underwriting and approval.
