Everything You Should Know About Mixed-Use Properties

What is a mixed-use property? 

A mixed-use property is, as the name suggests, used for multiple purposes and typically refers to commercial-residential properties. A mixed-use property will have multiple use classes, such as A1 – Shops and C3 – Dwelling Houses.

B&Bs are a prime example of mixed-use properties, where the owners live on-site and rent out the rest of their property to holidaymakers. Similarly, shops with flats situated overhead are mixed-use buildings.

On the smaller end of the scale, a chiropractor, massage therapist or beautician may use a spare room of their home in which to provide services to their clients.

Mixed-use properties may also refer to buildings that have been divided into apartments and commercial units like shops and restaurants. London’s The Shard is a prime example of this, comprising offices, restaurants and a hotel, and exclusive residences.

Regardless of the size, mixed-use properties are most commonly arranged with the commercial elements on the lower floors, with the residential areas higher up. This gives residents privacy, quietness, and better views, while commercial owners benefit from street-level visibility and increased foot traffic.

What are the benefits of buying a mixed-use property? 

• Your property actively delivers a return on your investment, whether that is through rooms booked in a B&B, drinks served in a pub, or necks ‘cracked’ in a chiropractic surgery, your home is helping pay for itself.
• Mixed-use properties aren’t subject to the extra 3% stamp duty that buy-to-let properties are.
• Owning a mixed-use property often comes with being your own boss, which has the benefits of autonomy, control and freedom.
• Living and working in the same building means your commute is negligible.

What are the drawbacks of buying a mixed-use property? 

• You can’t buy a mixed-use property with a traditional buy-to-let mortgage and most specialist mortgage providers require a 25% deposit as a minimum.
• Mortgage rates are higher for semi-commercial mortgages compared to buy-to-let properties, at around 4% and 2% respectively.
• Specialist insurance is needed; you can get separate commercial and private insurance, but this can be a hassle.
• Those who live and work in the same building may find it difficult to “switch off”.

What should you consider before purchasing a mixed-use property? 

• The viability of your business:
  • For B&Bs, is there a strong level of tourism in the area in which you’re looking to buy? How many existing B&BS and guesthouses are nearby?
  • For pubs and salons, will there be enough footfall?
  • Will your business earnings cover your mortgage repayments, plus your other monthly costs and living expenses?
• Location
  • How many people and potential customers live in, or visit, your area?
  • Are you near transport links, commercial centres, or beauty spots?
• Get a survey
  • As with any property purchase, you need to be sure you are buying a structurally-sound building. Any issues here will cause problems for both your home and your business, so it’s important to get it checked
• Budget – as well as the deposit and repayments, you may need to pay for:
  • Renovations
  • New furniture
  • Running costs (gas, electricity, water etc.) may be quite high, particularly if you are running an accommodation-based business
• Size
• Is the property big enough for you to live and work in?
• Will the property be able to accommodate the growth of your business (or personal life, e.g. children)?

How we fit in 

Once you’ve decided on buying a mixed-use property, it’s time to find the right one for you! Take a look at our guest houses and hotels & pubs we currently have on the market.

If you can’t find your ideal property, get in touch, as we’re happy to help find your perfect mixed-use property.