Commercial Investment Mortgages Cardiff
Long-term mortgages secured against income-producing commercial property, offices, retail, industrial, mixed-use. Up to 75% loan-to-value. Interest cover ratio test 140 to 160% stressed. Interest rates 6.5 to 8.5% pa. 5 to 25 year repayment terms. Limited company SPV, LLP and individual structures all supported.
LTV
Up to 75%
Rate
From 6.5% pa
Term
5 to 25 years
ICR
140 to 160%
What is an investment commercial mortgage and how is it underwritten?
A commercial investment mortgage is long-term debt secured against a let commercial property held as an income-producing asset. The borrower is typically a limited company SPV (the dominant structure for new acquisitions in Cardiff), an LLP, or an individual investor; the security is the property; the affordability test is rent against the cost of borrowing. Unlike a residential buy-to-let mortgage, which tests personal income and rental yield against ASTs (or, in Wales, occupation contracts under the Renting Homes (Wales) Act 2016), commercial investment underwrites against business tenancies on FRI (full repairing and insuring) leases.
The headline underwriting metric is the interest cover ratio (ICR): gross rent divided by interest cost, typically required at 140 to 160% stressed at a notional rate 1 to 2% above pay rate. Some lenders also test DSCR (debt-service coverage ratio) on a fully-amortising basis at 130 to 145% cover. Loan-to-value commonly stretches to 65 to 75% for income-producing assets with a clear lease.
Tenant covenant and lease length are the second-order drivers, and they matter as much as LTV. A 10-year unbroken lease to an investment-grade tenant on a Central Square or Capital Quarter office floor (the BBC Cymru Wales, HMRC, Welsh Government, Admiral Group plc tenant base) prices materially better than three two-year leases to local independents on a secondary parade. Vacant or part-let assets fund through specialist desks at tighter LTVs and wider interest rates, typically via commercial bridging with an agreed term-out exit.
Investment commercial lending sits outside FCA regulation in almost all cases, it is a business borrowing against a business asset, not a residential mortgage. Stamp duty land tax applies on purchase at the standard commercial rates (0% to £150K, 2% £150K to £250K, 5% above £250K). For limited company SPV structures we factor SDLT, valuation, legal and arrangement fees into the all-in deposit requirement before submission. Wales-registered panel solicitors are the lender requirement on Cardiff completions.
Pricing and lender appetite across the Cardiff investment market
1. Asset and rent appraisal
We review the property, the lease, the tenant covenant and the rent roll. ICR and DSCR modelled at three lender stress rates so you see where each desk will land.
2. Indicative terms in 48 hours
Three to five lender quotes, interest rate, LTV, term, fees, ICR comfort, conditions. You pick the preferred route.
3. Credit pack
Property file, lease, tenant accounts (where covenant matters), borrower SPV pack, deposit proof. Sent to chosen lender.
4. RICS Red Book valuation
Includes market rent assessment and estimated rental value (ERV), both important to the underwrite. Typically 2 to 3 weeks.
5. Credit approval and legal pack
Approval typically 1 to 3 weeks post-valuation. Legals 3 to 5 weeks (longer if leasehold or complex tenant pack) through Wales-registered panel solicitors.
6. Drawdown and SDLT
Funds drawn at completion. Stamp duty paid by buyer. ICR sometimes monitored through life of facility on larger or multi-let assets.
Investor profiles we routinely place in Cardiff
- Investors buying let offices at Central Square, Capital Quarter, Callaghan Square and Brunel House (CF10)
- Landlords acquiring let retail (St David's Cardiff adjacent, Queen Street, Albany Road, Wellfield Road, Pontcanna Street, Llandaff High Street)
- Industrial investors buying let units at Tremorfa, Wentloog Corporate Industrial Park, Cardiff Gate Business Park and Pentwyn
- Limited company SPV structures for new acquisitions; individual investor purchases at the smaller end
- Refinancing existing investment portfolios off maturing 5-year fixes
- Cardiff Bay and Mermaid Quay mixed-use waterfront investments
- Hands-off investors buying long-WAULT institutional-style assets at the top of the bracket
Where Cardiff commercial investment volume actually sits
Cardiff (Caerdydd) runs a distinctive regional commercial investment market, the capital of Wales, c. 384,000 residents in the city proper and c. 1.1 million across the Cardiff Capital Region, anchored by the Central Square regen (BBC Cymru Wales, HMRC, Cardiff School of Journalism, Blake Morgan, Hodge Bank), the Capital Quarter cluster (Admiral Group plc HQ, Hugh James, Deloitte), Cardiff Bay regeneration (Welsh Government, Senedd, Wales Millennium Centre, BBC Roath Lock) and the St David's / Queen Street retail core (c. 1.4M sq ft anchored by John Lewis). The prime office cluster is dominated by mid-cap institutional investors, but the £500K to £3M bracket we work most often is the deep volume zone, secondary offices around Capital Quarter and Tyndall Street, retail in the city centre and Queen Street, industrial at Tremorfa and Wentloog, and semi-commercial parades across Roath, Pontcanna and Canton. Interest rates currently 6.5 to 8.5% pa depending on covenant and LTV. Shawbrook, Allica, Hampshire Trust Bank, Cambridge & Counties, InterBay Commercial, Cynergy Bank, LendInvest, NatWest, Lloyds, Barclays and Santander all compete on Cardiff investment cases. Hodge Bank (Welsh-HQ specialist commercial lender) also features in the mix.
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Exploring Commercial Investment Mortgage for your Cardiff scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.