Commercial Investment Mortgage Brighton
Long-term mortgages secured against income-producing commercial property: North Laine and The Lanes retail, Edward Street Quarter office investment, Preston Barracks Plus X creative office floorplate, Hove central retail on Western Road. Loan-to-value 60 to 75%, interest cover ratio 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
60 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 across the Brighton market), 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, 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 60 to 75% for income-producing Brighton assets with a clear lease; lenders can trend conservative on Brighton LTVs because tourism-led retail and leisure carries more cyclical risk than office or industrial-led markets elsewhere.
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 office tenant in the Edward Street Quarter prices materially better than three two-year leases to local independents on a secondary North Laine parade. Vacant or part-let assets fund through specialist desks at tighter LTVs and wider interest rates, typically via commercial bridge-to-let with an agreed term-out exit. Brighton deal flow is biased toward central retail and mixed-use, seafront leisure and the new-build office stock at Edward Street Quarter and Preston Barracks; pure industrial investment is much thinner than in comparable South-East cities.
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. Indicative case seed: a £2.9M let Edward Street Quarter office investment, FRI lease, 9 years unbroken, strong-covenant professional services tenant, priced at 65% LTV (£1.885M facility) on a 5-year fix at around 6.9% pa with ICR comfortably above 150%.
Pricing and lender appetite across the Brighton 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 covering interest rate, LTV, term, fees, ICR comfort and 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; central Brighton listed-building and seafront instructions take longer.
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).
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 across Brighton
- Office investment buyers in the Edward Street Quarter and around Preston Barracks Plus X creative cluster
- North Laine and The Lanes retail and leisure investment buyers in central BN1
- Western Road retail strip investors across central Brighton and Hove
- Kemptown semi-commercial portfolio investors with parade retail and upper-floor residential
- Norton Road and Hove central professional services freehold and let-office investors
- Limited company SPV structures for new acquisitions; individual investor purchases at the smaller end
- Refinancing existing investment portfolios off maturing 5-year fixes from 2019 to 2021 vintage
- Hands-off investors buying long-WAULT trade-counter or roadside assets let to national covenants
Where Brighton commercial investment volume actually sits
Brighton runs a distinctive regional commercial investment market in the UK: tourism-and-creative-led, retail and leisure biased, with an unusually small industrial base and a growing new-build office tranche at Edward Street Quarter and Preston Barracks. Brokered investment volume is dominated by North Laine and The Lanes retail in BN1, the Edward Street Quarter office investment cluster in BN2, the Preston Barracks Plus X creative office floorplate, and Hove central retail along Western Road in BN3. The £450K to £2.5M bracket is the deep volume zone for smaller landlords: parade retail in North Laine and Seven Dials, semi-commercial blocks across Kemptown and Hove, and central upper-floor mixed-use through the BN1 and BN3 ring. The £2.5M to £15M+ bracket is where the office investment flow sits, particularly around the Edward Street Quarter and Preston Barracks regen schemes. Central retail yields currently sit close to the wider regional UK average, with prime North Laine running firmer reflecting the structural footfall from roughly 11 million annual visitors. Interest rates currently 6.5 to 8.5% pa depending on covenant and LTV; LTVs typically capped at 60 to 75% reflecting the cautious valuation stance on tourism-led retail. Shawbrook, InterBay Commercial, Cynergy Bank, LendInvest, NatWest, Lloyds, Barclays and Santander all compete on Brighton commercial investment cases; Allica Bank, HTB and Cambridge & Counties engage selectively across the South Coast.
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Exploring Commercial Investment Mortgage for your Brighton scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.