The firm explained that since the stamp duty changes on 1 April, developers were turning semi-commercial properties into residential residences to take advantage of non-residential stamp duty taxes.
Under current stamp duty rules, a residential property bought for £200,000 would incur a £11,500 stamp duty payment, compared to a semi-commercial build, which would be £1,000.
For a property worth £500,000, the difference is £40,000 versus £14,500.
SDKA said that once the properties were bought, developers were using permitted development rights to convert the commercial element to residential, which it said has the potential to boost income streams from the same asset.
Scot Tsang, head of operations and in-house legal at SDKA, said: “The numbers are compelling to developers, as stamp duty savings can go a long way to, if not cover all, the associated costs of converting a semi-commercial asset into a fully residential offering, which can increase income streams and asset value.
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“By enhancing our lending criteria for semi-commercial properties to 75% LTV, an increase of 5%, we are ultimately providing greater flexibility and higher lending potential for every property professional and making semi-commercial properties an even more attractive investment.”
The lender offers interest rates from 0.85% per calendar month up to 75% LTV and terms up to 24 months. Its maximum loan size is £10m.
Last month, SDKA hired Chris Simpson as an underwriter in an expansion of its customer-facing team.
