SDKA has reduced its bridging finance rates on semi-commercial deals, cutting its BRIDGE 75 product by 60bps to 0.95% per calendar month for loans above £250,000 up to 75% LTV. The move comes as demand rises among UK property investors seeking opportunities in semi-commercial assets and alternative income streams.
The lender, which operates across England, Wales and Scotland, said the pricing change follows a sustained increase in enquiries and applications. Investors are responding to competitive pricing in the semi-commercial sector and exploring ways to diversify rental income.
Demand grows for semi-commercial bridging finance
SDKA offers loan terms of up to 24 months, with a maximum facility size of £2.5m. The lender has positioned the rate reduction as a response to both borrower demand and shifting market conditions in the UK property market.
Interest in semi-commercial property has also been shaped by investor strategies focused on repurposing assets. Brokers and developers are increasingly exploring conversions from mixed-use buildings into residential units, particularly where planning and local demand support such changes.
This activity is feeding into higher demand for bridging finance, which remains a key tool for short-term acquisitions, refurbishments, and refinancing before exit onto longer-term buy-to-let or development finance products.
Stamp duty savings drive investor interest
Stamp Duty Land Tax (SDLT) differentials are playing a role in shaping investor behaviour, particularly for those comparing residential and semi-commercial purchases.
Current thresholds highlight notable cost differences:
A £200,000 residential purchase incurs £11,500 in SDLT, compared with £1,000 for a semi-commercial property
At £500,000, SDLT rises to £40,000 for residential assets, versus £14,500 for semi-commercial, a difference of £25,500
These savings are prompting some investors to target mixed-use assets, either to retain dual income streams or to convert them into residential properties while benefiting from lower upfront tax costs.
What this means for lenders and brokers
The reduction in bridging finance rates reflects increasing competition among UK lenders targeting semi-commercial deals. As pricing tightens, brokers may see more options for clients seeking short-term funding solutions with higher leverage.
“We have offered commercial and semi-commercial bridging since our inception 10 years ago, they are very much the bedrock of our business with increasing deal numbers every year,” said Kunal Mehta, managing director of SDKA (pictured).
“Last year we boosted the BRIDGE 75 Semi-Commercial LTV to 75% in response to market conditions, and we have reacted again by reducing the rate to 0.95% pcm to further enhance our competitive offering against a backdrop of reducing semi-commercial property prices around the UK.”
For lenders, the trend points to sustained demand in a segment that sits between traditional buy-to-let and commercial finance. Semi-commercial assets can offer blended yields, combining residential rental income with commercial leases, which may appeal to investors seeking resilience in uncertain market conditions.
Outlook for bridging finance rates
Bridging finance rates could remain under pressure if competition intensifies and property prices in the semi-commercial sector continue to soften. However, lender appetite will likely depend on risk assessments, exit strategies, and broader UK mortgage market conditions.
As investors weigh tax advantages, pricing opportunities, and conversion potential, semi-commercial bridging is expected to remain an active area of the market in the months ahead.
