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A clear shift is under way in the commercial mortgage market, and Amar Dhanota, Director and Senior Mortgage Consultant at London FS, is seeing it play out directly in her client conversations. Speaking to Mortgage Introducer, she describes a growing number of established business owners reassessing the economics of renting their commercial premises and concluding that ownership now makes more sense. With strong trading histories behind them, these clients are looking at what they pay in rent and business rates, comparing it with the cost of a commercial mortgage, and deciding the numbers work in their favour.
The trend is being reinforced by a parallel wave of refinancing activity, as existing commercial borrowers reach the end of fixed-rate terms and look to restructure. Amar is currently handling a deal for a client who purchased a commercial unit a couple of years ago for around 500,000 to 600,000 pounds, has since outgrown it, and is now acquiring a larger property at approximately 3.2 million pounds. One critical point she flags for both borrowers and brokers is the gap between initial rate indications and the rate a client ultimately receives. In commercial lending, pricing is negotiated around the individual deal and the lender’s assessment of risk, meaning what a lender quotes at the outset can shift considerably once underwriting begins. Business owners weighing a purchase can turn to a commercial finance broker London to structure the deal and manage lender negotiations.
For brokers considering moving into commercial from a residential background, Amar’s advice is to speak to lenders before taking on a case, not after. She was open with lenders about her own learning curve when she first entered the commercial market, asking directly for guidance on structure and documentation. That transparency paid dividends. She also highlights legal complexity as an area that consistently catches people out – commercial conveyancing operates on a different timeline and with different considerations from residential. A case she restarted in April received a mortgage offer in July, a turnaround she attributes directly to thorough front-end preparation.
Read the full feature on Mortgage Introducer.
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