Semi-commercial lending becoming a market ‘mainstay’ thanks to diversification

Semi-commercial lending is providing comfort in the business mortgages market amid asset-class diversification by property investors, said experts at the 2026 Finance Professional Show.

The observation was made during the commercial mortgages panel, hosted by Nicola Firth, founder and CEO at Knowledge Bank.

A day after the Bank of England’s Monetary Policy Committee lifted UK base interest rates by 25 basis points to 4%, panellists at reported that mixed asset classes such as shops with residential property above are playing an important role by helping balance sluggish growth.

“Semi-commercial has been very consistent in this market,” said Marc Callaghan, head of commercial lending at OSB Group.

He said diversification by landlords is seeing the sub-sector become a “mainstay” of the commercial mortgage market.

Theo Theodosiadis, head of credit at Proplend, agreed, saying his firm also feels comfortable with the semi-commercial sub-sector.

Others said they saw a trend in semi-commercial property as part of a broader context.

“We see landlords moving towards more multiple sources of income,” added Duncan Kreeger, founder and chief executive at TAB.

“We really like the high street as well. I think there’s a good opportunity there for us to lean into properties that we like.”

Panellists at the event at London Olympia also highlighted other positive areas where a balance is being found between traditional commercial property investments and newer sub-sectors.

“Our sweet spot is in sectors such as agriculture and hospitality [6 mins],” said Kawai Chung, chief executive of FOLK2FOLK. He identified strong activity at farm shops and garden centres.

Theo added that car parks and petrol stations are also showing strong levels of activity.

“For us, it is more about hospitality, hotels and pubs,” added Jamie Russell, commercial director at Ortus Secured Finance.

Jamie was seeing signs of a slowdown In commercial offices from the regional office boom of a few years ago, with some businesses not taking up renewal clauses.

However, Marc at OSB said specific parts of the commercial market, including offices and some leisure, remain very strong.

“It depends on who the investor,” is,” he added. “We did five golf club deals last year. The demand was very strong so we were able to take a view.”

Charlotte Rutter, head of partnerships and marketing at Roma Finance, said that investors are having to find value where they can in a difficult market.

“It has not been the growth year that we hoped it was going to be,” she said.

With few economic pundits seeing growth on the horizon, Stephen Spinks, head of broker sales for commercial mortgages for South and Central, at Allica Bank, said that the focus for commercial property lenders will remain on the ability of investors to service their loans.

Jamie at Ortus agreed. He said lenders will prioritise experienced investors who have the ability to withstand difficult market conditions and find growth and those who are able to access liquidity

“These are the two things that lenders are looking for,” he said.