New mixed use mortgage monitor reveals borrower appetite is ‘strong’
Semi-commercial lending volumes will exceed £1bn for the first time this year, according to commercial mortgage lender and bridging specialist TAB.
Figures from its inaugural Mixed-Use Mortgage Monitor estimate that total UK semi-commercial lending reached approximately £242m during Q2 2026, up from £201m in the same period last year, representing annual growth of around 20%.
TAB founder and CEO Duncan Kreeger says the market is expanding rapidly. “There are more deals being done. There is more money being lent. Borrower appetite is strong.”
He says the semi-commercial market has grown by more than 30% since TAB first started monitoring it in Q1 2025. “As a result, I think there’s a good chance the semi-commercial segment could hit the £1bn this year,” he says.
Its report also estimates that transaction volumes increased by 13% over the same period, from approximately 415 completions in Q2 2025 to 470 in Q2 2026.
Changing patterns
Kreegar says this reflects mainstream banks stepping back from smaller and more complex deals, creating opportunities for challenger banks and specialists – while experienced residential landlords diversify into mixed-use assets for better income resilience.
The index shows the number of active lenders operating in the sector has risen from 25 to 28 over the past year, while product choice has expanded by nearly 20% year-on-year, with lenders now offering 94 dedicated semi-commercial and mixed-use mortgage products.
Kreeger said: “While the market is starting to mature, it’s also becoming increasingly specialist. Mainstream high-street banks scaled back complex commercial lending significantly after 2008, creating space for a wave of challenger banks and specialist lenders that has continued to expand ever since.
“Refinancing of older low-rate loans is supporting activity to a degree. But we are seeing more demand for mixed-use finance from investors who have traditionally focused on the residential market alone – investors who want to diversify their portfolios.
“Borrower demand for well-structured mixed-use deals is growing, particularly from experienced landlords disappointed by under-performing residential portfolios who are looking to start moving into commercial. At the same time, lender competition is increasing, giving brokers and borrowers more choice than they had a year ago.
The tracker found average loan sizes have risen by around 6% year-on-year, from £484,000 to £515,000.
Looking ahead, TAB expects the market to grow steadily during the second half of 2026.
