Bridging lender SDKA has increased its maximum loan-to-value for semi-commercial properties to 75%, responding to rising demand from developers seeking to capitalise on lower stamp duty liabilities associated with non-residential purchases.
The change comes as property professionals identify a growing opportunity in acquiring semi-commercial buildings and subsequently converting the commercial element into residential units under permitted development rights.
The strategy allows investors to secure properties at favourable tax rates before repositioning them for enhanced rental yields or capital growth.
Under the current Stamp Duty Land Tax (SDLT) framework, introduced on 1 April 2025, a £200,000 residential property would attract a tax bill of £11,500, whereas the equivalent semi-commercial purchase would incur just £1,000.
For a £500,000 acquisition, the disparity rises to £25,500 – with SDLT charges of £40,000 and £14,500 respectively.
Scot Tsang (pictured), head of operations and in-house legal at SDKA, said the changes were designed to support developers in maximising these advantages.
“The numbers are compelling to developers as SDLT savings can go a long way to, if not cover all, the associated costs of converting a semi-commercial asset into a fully residential offering which can increase income streams and asset value,” he said.
“By enhancing our lending criteria for semi-commercial properties to 75% LTV, an increase of 5%, we are ultimately providing greater flexibility and higher lending potential for every property professional and making semi-commercial properties an even more attractive investment.”
SDKA lends across England, Scotland and Wales, offering bridging finance on residential, semi-commercial and commercial properties. Its products include rates from 0.85% pcm, maximum terms of up to 24 months and loans up to £10 million.
