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A Mortgage Introducer article by Hisham Elabaire

Where there is change, there is always opportunity and we have certainly seen a huge amount of change in the lending and property markets in recent months as a result of COVID-19.


One such trend that you will already be aware of, has been the smooth transition to homeworking for millions of people across the country, leading many to speculate that when people do fully return to offices, they will not do so at the same scale as they did previously. It is unlikely that most businesses will do away with their offices entirely, but many will probably take a more conservative view on the amount of space they need. With reduced demand for commercial space, this should put downward pressure on property values, and this presents an opportunity for your self-employed clients who currently rent their workspace.


Even before lockdown and the en masse shift towards homeworking, it was generally considered that owning a commercial property was the cheaper option than renting one, and certainly one with more potential to contribute to the overall financial strength of the business. So, now with potential deals to be had, it’s a great opportunity for your self-employed clients to take the leap, and it’s not just offices.


Commercial mortgages are available for trading businesses that want to purchase or refinance their own premises. They can cover a variety of property types such as retail units, offices, factory units or any commercial premises used by the business.


The maximum loan amount is normally 75%, but in some circumstances up to 100% may be possible for a selection of professionals or with additional security. Interest rates start from around 2% over the base rate and lender fees from 1%. Repayment loans are typically over 20 years, but interest only facilities can be arranged. The funds can be borrowed in personal names, limited company, pension fund or trust.


So, why not start a conversation with your self-employed clients, to discuss whether they want to grab the current opportunity to purchase the commercial premises.


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