In a year that’s already delivered a fair share of market ups and downs, semi-commercial property is quietly growing in popularity. It’s not the trendiest asset class. It certainly doesn’t get as much press as student accommodation. And not every lender operates in this space.
But for brokers and investors looking for flexibility and resilience, semi-commercial property is looking like a shrewd play.
That’s something we’ve seen first-hand. Brokers are coming to us with clear intent. They’re not testing the water. They’re ready to move. And while the Easter slowdown and early May bank holidays are always part of the cycle, the pace we’re seeing now feels different. More focused. More decisive.
What is semi-commercial, and why now?
Semi-commercial, or mixed-use, as it’s sometimes called, covers a wide range of properties. Retail units with flats above. Cafés with residential space on site. Small local schemes that blend commercial activity with residential use.
What sets them apart is how they spread risk. Two income streams. Two tenancy types. One helps balance out the other. If a flat sits empty, the shop below might still be paying rent. If the shop becomes vacant, the flats could still be let.
In a market where nothing is guaranteed, that dual layer of income provides something lenders and borrowers alike can take comfort in.
Holding its own in a mixed market
A semi-commercial investment relies on the performance of both the residential and commercial elements. While some investors may still have concerns around the commercial sector, the data suggests resilience in key areas.
According to Knight Frank’s UK Real Estate Navigator, published in early 2025, commercial investment volumes hit £10.1bn in Q4, the strongest quarter of the year and a 29% increase on Q3.
Retail saw £2.3bn in transactions, almost double the average seen since early 2022, while industrial and logistics reached £2.9bn, their highest since mid-2022. Office investment also picked up, totalling £3.6bn.
That wider recovery matters. It shows that investors are active again, but they’re choosing their spots. Income stability, asset resilience and long-term potential are top of the list.
That’s exactly where semi-commercial fits in. It blends residential and commercial income, often with better yields than pure resi and less volatility than pure commercial.
In a market still adjusting to rate shifts and price sensitivity, that dual-income profile gives borrowers more flexibility and lenders more confidence in the underlying asset.
Not every lender
One of the quirks of the semi-commercial space is that it’s not universally serviced. Some lenders avoid it altogether, viewing it as too niche or too complex.
Others may struggle to price or underwrite mixed-use assets effectively, especially if their teams are siloed between resi and commercial.
For brokers, this creates a challenge. You might have a perfectly viable client with a good quality semi-commercial asset, but you’ll need to know where to go.
We’ve spoken to several brokers in recent weeks who’ve said the same thing: they want to place these kinds of deals, and they know clients are interested. But it’s a space that requires confidence, both in the asset and in the lender’s ability to assess it properly.
From our side, it’s an area we’re comfortable with. We’re happy to look at semi-commercial deals. And we’ve built the flexibility into our process to assess the whole picture, not just one part of the property in isolation.
Semi-commercial has emerged as a practical route forward. It suits this moment: a bit more flexible than pure commercial, often better value than standard resi, and still offering meaningful returns.
A solid option in an uneven market
In this environment, semi-commercial stands out for its balance. It doesn’t rely on one tenant type. It isn’t tied to a single income stream. And it offers investors the chance to blend residential stability with commercial opportunity.
For brokers, it’s a deal type that can unlock options – especially if you’re working with clients who value diversification or are looking to de-risk future income. And for lenders like us, it’s a space we’re very happy to support.
In short?
Semi-commercial might not be everyone’s focus, but right now, it’s definitely having a moment. And we’re here for it.
Gavin Diamond is CEO at Inspired Lending
