Commercial Property Portfolio Mortgage

Streamline finance, leverage equity, and grow your portfolio with a single, flexible mortgage solution for multiple commercial properties.

Simplified admin with a single monthly payment
Leverage equity across your portfolio for growth
Secure competitive rates based on your entire portfolio
Reduce risk with a diversified portfolio view
Faster funding for new property acquisitions

How We Work: A Step-by-Step Guide to Your Portfolio Mortgage

1. Get a Customised Quote & Strategy Session

Our specialists will conduct a detailed review of your entire property portfolio and your investment goals. We'll provide a sense-check on what's achievable and outline the best strategy and terms.

2. Secure A Decision in Principle

We'll package your portfolio information and secure a Decision in Principle (DIP) from a suitable lender, confirming their appetite to provide the finance you need.

3. Submit Your Application

Once you're ready to proceed, we’ll submit the formal application. This involves managing multiple valuations and complex legal work, all of which we mediate to ensure an efficient process.

4. Complete Your Finance

We will keep you updated until the funds are released, whether for a refinance or a new purchase. We're here to support your portfolio's growth long-term.

Contents

Commercial Property Portfolio Mortgage

Investing in UK commercial property provides a stable, long-term return on investment with continuous rental income. For businesses looking to develop a well-structured and profitable UK real estate management and investment stream, a commercial property portfolio mortgage provides a powerful and efficient debt solution that will minimise costs and streamline administration.

Key Takeaways

Commercial property portfolio mortgages bring management of multiple properties under one combined structure.
Investors with portfolio mortgages can leverage existing equity for future investment or to keep rates low.
Clifton Private Finance are here to secure a low-rate, flexible portfolio mortgage for your business.

Book Appointment

Why Invest in Commercial Property

Property investment in the UK has always offered a steady and reliable venture opportunity, but many landlords overlook the advantages of commercial property, leaning towards residential rentals that offer headline-grabbing rental yields rather than the often superior benefits achieved in commercial and industrial sectors.

Improved rental finance security - While some startups and small businesses can prove to be unreliable renters, the majority of established companies renting commercial property have a well-structured mid- to long-term plan in place, with stable financial backing and a view to premises payments as a priority. Residential lets may be greater risk, especially when renting to younger tenants or those without established careers.
Longer term leases - The average residential rental period is 6 to 12 months, even with more reliable tenants. Residential renters are typically keen to move on to homeowning, with long-term stability a comparative rarity. Conversely, companies like to establish longer term leases, often structuring their businesses with ongoing premises rental part of their fiscal planning for 5 to 15 years.
Tenant investment - Business renters will commonly invest into the internal infrastructure and upkeep of the property to the long-term benefit of the property owner, something which is far rarer in the residential sector.
Flexible maintenance opportunities - Customisable contracts include those set up as full repair and insurance (FRI) leases, moving much of the repair and insurance burden to the tenant. Conversely, ongoing maintenance of a residential property remains entirely the responsibility of the landlord.
Tighter contracts - Commercial property contracts tend to be more detailed, with fewer statutory rights and protections for the tenant. Responsibilities are more clearly defined, which can help with any disputes.

While residential letting is seen as the default property-based opportunity for UK investment, commercial property landlords may enjoy a smoother experience, with potentially higher yields and comparable returns on investment.

Book Appointment

Moving From a Single Property to Multi-Premises Ownership

Companies that hold one or two properties have little need for specialist products outside of individual commercial mortgages that are secured directly on each property. However, when expanding your commercial letting portfolio, a commercial property portfolio mortgage offers several advantages. These include:

Simplified Administration

The administrative overhead of managing multiple mortgages has a direct cost implication. When multiple separate mortgages are combined and replaced with a portfolio mortgage, this administrative burden is significantly diminished.

Combined repayment schedule - Cash flow and debt management are improved when several mortgage obligations are merged into a single payment.
Existing paperwork for reuse - When expanding to additional properties, much of the documentation is already in place, making new applications easier and more accurate.
Single point of contact - Discussions and negotiations regarding your property loans are done through a single point of contact, which provides greater understanding and flexibility.
Tax management - A business portfolio mortgage will streamline your tax calculations. Landlords combining a move to a portfolio mortgage alongside a business restructuring from a private individual to a limited company will enjoy additional tax benefits. To learn more about the impact of limited company structure on rental taxation, look to our knowledge base.

Unified Equity

Leveraging the equity built up in existing properties to support a new investment is straightforward with a commercial property portfolio mortgage. The loan-to-value (LTV) of the portfolio mortgage is calculated as an overall whole, providing improved buying power and lowering the need for capital investment for deposits.

Consider the following illustrative example, for a business with a portfolio mortgage with a maximum 75% LTV:

XYZ Co. remortgages its existing property assets into a single combined portfolio mortgage. At this time, the property values and outstanding mortgage balances are:

XYZ Co. Property Assets

Property	Market Value	Balance
A	£810,000	£450,000
B	£540,000	£320,000
C	£395,000	£280,000

Bringing these three separate mortgages together into a single commercial property portfolio mortgages creates a cleaner profile with a total market value of £1,745,000 and a mortgage balance of £1,050,000 - a total LTV of just over 60%.

Looking to purchase a fourth property at £600,000 with an individual commercial mortgage would have required a capital deposit of £150,000. However, bringing the additional property into the portfolio mortgage allows XYZ Co. to leverage the existing equity:

Full portfolio value (including new property): £2,345,000
Maximum mortgage at 75% LTV: £1,758,750
Current mortgage balance (excluding new property): £1,050,000
Available to leverage for new property: £708,750

Using a portfolio mortgage, XYZ Co. is able to purchase the fourth £600,000 property without needing any additional capital usage for a deposit, allowing the investment to go forward with minimal impact on their current cash funds.

Consolidated Rate

Multiple mortgages means multiple mortgage rates. When you move to a portfolio mortgage, one rate governs the entire estate.

As when leveraging equity to purchase additional properties, the consolidated LTV of the mortgage can be beneficial in securing a lower interest rate, as lower LTVs are offered superior rates than higher LTV loans.

It should be noted that a single rate may not always be an improvement when bringing mortgages together. If an existing rate is currently fixed at a lower rate, for example, it may be prudent to wait and time the switch to a portfolio mortgage when that term is over. Your business mortgage advisor at Clifton Private Finance will discuss the options with you, ensuring that you minimise the costs and interest rates of your commercial property portfolio mortgage.

Lower Risk

When your commercial property mortgages are individual, a single poorly performing property can significantly affect your future borrowing and credit status.

A portfolio mortgage softens this risk by considering the properties collectively, with weaker commercial lets offset by stronger ones. This greatly reduces the risk of having to sell single properties that are temporarily struggling in the market, for example, during an extended void period.

Flexibility and Speed

Being able to seize opportunities in the market is key for investor businesses looking to make the most of an expanding property portfolio.

Individual mortgages can hamper decision-making agility, requiring long application processes that start from scratch each time. A portfolio mortgage can open the door to fast capital and can be combined with specialist bridging finance to create a stable platform for future investments without delay.

Refinancing

Portfolio mortgages are easier to manage when needing to refinance or restructure. The scale of the mortgage may also encourage greater interest from lenders, potentially widening the spread of products available for a more competitive and cost-effective remortgage.