Commercial Mortgages on the Rise: Why More Companies Are Buying Their Own Premises

Discover why more UK businesses are using commercial mortgages to buy their premises as landlords sell and offer tenants first refusal. Learn how Lime Finance Solutions helps SMEs secure stability and growth.

September 8th, 2025

Introduction

The UK commercial property market is shifting. Historically, leasing was the default for SMEs, offering flexibility with less upfront cost. But today, with many landlords selling their assets and offering tenants first refusal, more businesses are seizing the chance to buy their premises with a commercial mortgage.

This movement isn’t just about owning property — it’s about long-term stability, cost efficiency, and strategic growth.

The Rise of Commercial Mortgage Demand

UK Finance reported that commercial property lending reached £43.5 billion in 2023, an increase of almost 9% year-on-year. Notably, a growing proportion of this lending is for owner-occupier purchases rather than investment speculation.

Other key insights:

62% of SMEs that own their premises report improved long-term security.
Around 1 in 3 UK landlords are considering selling properties in the next 3 years.
Savills data shows commercial property values rose 4.8% in 2023, strengthening the case for ownership.

“Businesses no longer want to be at the mercy of rental markets. A commercial mortgage provides both security and an opportunity for capital growth,” explains Dave Farmer, at Lime Finance Solutions.

Why More Companies Are Buying Their Premises

1. Stability and Control

Owning property gives businesses freedom from:

Rent reviews and unpredictable hikes.
Risk of eviction due to landlord decisions.
Limitations on adapting premises to meet operational needs.

2. Cost Efficiency

With commercial mortgage deposits typically 20–30%, repayments are often comparable to or lower than rent. Fixed-rate options also protect against rising interest rates.

“Many businesses are surprised to learn their mortgage repayments are on par with rent — but instead of paying a landlord, they’re building equity,” notes Elena Leach, Commercial Property Specialist at Lime Finance Solutions.

3. Long-Term Investment

Ownership adds a valuable appreciating asset to the balance sheet. For many SMEs, this dual benefit — security plus potential capital growth — makes a commercial mortgage a smart move.

Landlords Offering First Refusal

A defining feature of today’s market is that landlords are increasingly giving tenants the first option to buy before selling properties on the open market.

Advantages for tenants:

No competitive bidding wars.
Time savings during negotiations.
Ability to secure premises they already know works for them.

British Property Federation data suggests that 45% of 2023 commercial property sales involved tenant buyers, highlighting the strength of this trend.

Case Study: From Tenant to Owner

A South East based drainage company had the opportunity to acquire their premises. They had leased the same unit for 15 years. When the landlord decided to sell, they were offered first refusal. By securing a commercial mortgage through Lime Finance Solutions, the business avoided relocation costs and gained an appreciating asset now valued at 15% higher than its purchase price in under two years.

The Bigger Market Picture

This shift is part of broader market forces:

Landlord exits: Many landlords are capitalising on property values and preparing for potential tax changes.
Rental inflation: In 2023, commercial rents rose by 6%in some regions.
Lender appetite: Banks and specialist lenders are competing to finance SMEs through commercial mortgages, often offering flexible terms.

Final Thoughts

For ambitious SMEs, taking on a commercial mortgage is no longer just a financing decision — it’s a strategic business move. Landlords are increasingly offering first refusal. Lenders are eager to fund growth. Now may be the right time for businesses to consider ownership.

At Lime Finance Solutions, we help businesses explore tailored commercial mortgage options, ensuring they make informed, strategic property decisions.

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.