Industrial Property Finance in 2026: Rates, Deposits and Lender Criteria

Industrial property finance is the debt that pays for buying, refinancing or developing warehouses, workshops, trade counters, open storage yards and multi-let estates. It sits inside the wider commercial mortgage market, but it behaves differently from retail or office lending because the underlying asset is different: industrial space is cheap to build, expensive to replace and, right now, in short supply. UK industrial and logistics investment reached £10.5bn in 2025 (Knight Frank, UK Logistics Market Dashboard, 2025), and that weight of capital tells you why lenders are comfortable funding the sector. We arrange industrial property finance across the UK and spend most of our time translating that appetite into terms a business or an investor can actually use.

The question we hear most often is a blunt one: can you get a mortgage on an industrial unit, and is it hard? The short answers are yes and not especially, provided the deal is put to the right lender in the right shape. This guide walks through what the finance covers, the two credit stories lenders underwrite, what it costs in 2026, the deposit you need, the criteria that decide approval, and the products in the order you are likely to meet them.

What industrial property finance covers

Industrial property finance is a family, not a single product. At one end sits the straightforward commercial mortgage for an industrial unit, a term loan of five to twenty-five years secured on the building. Alongside it are acquisition facilities for a purchase inside a tight deadline, development and refurbishment finance for building or reconfiguring space, bridging for short-term and auction situations, portfolio finance for a business or investor holding several assets, and refinance or term debt for anyone coming off an existing loan. Loan sizes run from £150,000 to £50m and above, which covers a single lock-up unit through to a distribution shed.

What unites them is the security. A modern warehouse or trade counter is a liquid asset with a deep tenant market behind it, so lenders will lend against it on sensible terms. What separates them is timing and purpose: you match the product to whether you are buying, holding, building or exiting, and the rate and leverage follow from there.

The two credit stories lenders underwrite

Every industrial deal tells one of two stories, and knowing which one you are telling changes how you present it.

The first is the investment story. Here the borrower is buying or refinancing a let unit and the loan is underwritten on the income: the rent roll, the quality of the tenant, the unexpired lease term, the estimated rental value and the strength of re-letting demand if a tenant walks. Lenders size these loans so that net rent covers the interest with a clear margin, commonly around 125 to 200 percent depending on the lender and whether the rate is fixed or variable. A well-let multi-let estate with staggered lease expiries reads well because no single tenant leaving sinks the coverage.

The second is the owner-occupier story. Here the borrower is a trading business buying its own premises, and the loan is underwritten on that business rather than on rent it does not collect. Lenders look at the accounts, the profit, and how comfortably operating cash flow services the debt. A profitable manufacturer or logistics operator buying the unit it already leases is one of the cleaner cases in commercial lending, because the occupier and the borrower are the same and the payment is simply rent redirected into a mortgage. We arrange owner-occupier mortgages on exactly that basis.

What industrial finance costs in 2026

There is no single industrial mortgage rate, and any broker who quotes one before seeing the deal is guessing. The rate is a reference rate plus a margin. The Bank of England base rate is 3.75 percent, held since the December 2025 cut, and that is the anchor the margin sits on top of. Lower leverage, stronger income cover, a good building and a clean track record all pull the margin down; a specialist asset, higher gearing or a thin trading history push it up. Our fuller commercial mortgage rates guide sets out how the margin is built.

As an indicative guide, a commercial mortgage on a let industrial investment starts from around 6 percent a year, and an owner-occupier mortgage for a strong trading business sits in a similar band. Development and refurbishment money is more expensive, from around 8 percent a year and usually rolled up, because the lender is funding a build rather than a standing asset. Bridging is priced monthly, typically 0.75 to 1.1 percent, and is a tool for speed rather than a place to sit. Arrangement fees across the standard products are typically 1 to 2 percent. Treat every figure here as indicative and asset dependent.

Deposits and loan to value

Deposit and loan to value are the same number seen from opposite ends: a 70 percent LTV loan means a 30 percent deposit. On an owner-occupied unit, expect to put in roughly 20 to 30 percent. On an investment unit you intend to let, lenders usually want a little more, around 30 to 35 percent, because they are relying on rent rather than your trading profit.

One detail catches buyers out. Lenders advance against the lower of the price and the valuation, so a down-valuation quietly increases the cash you need. If you agree £500,000 but the valuer returns £460,000, a 70 percent facility lends £322,000 against the valuation, and your working deposit rises from £150,000 to £178,000. Building that gap into your numbers early is the difference between a deal that completes and one that stalls at the last fence.

What lenders look for

Approval turns on the asset, the income and the borrower, weighted differently depending on which credit story you are telling. On the asset, lenders want standard construction, a usable eaves height, decent access and yard, and a location with genuine occupier demand. On the income or trading side, they want either a creditworthy tenant on a reasonable lease or a business with profits that clearly cover the repayment. On the borrower, they want a limited company or individual with a clean record and a sensible plan for the unit.

Is it difficult to get a commercial mortgage on industrial space? Less than most people expect, because the sector is in favour and the security is strong. What sinks applications is rarely the borrower and usually the packaging: a deal sent to a lender with no appetite for that asset class, a valuation gap nobody planned for, or income that does not stack up against the loan. As a specialist industrial finance broker with more than 100 lender relationships, our job is to match the deal to a lender that already wants it and to present it in the shape that lender approves.

The products, in the order you meet them

Most industrial journeys run through the same sequence. You often start with bridging finance to secure a unit at auction or inside a deadline a term lender cannot meet. If you are building or reconfiguring, development and refurbishment finance funds the works, drawn in stages and usually with the interest rolled up. Once the asset is standing, let and stable, you refinance onto a long-term commercial mortgage or term debt at a lower rate, which is where most industrial borrowers want to end up. Investors holding several assets can pull them together under portfolio finance rather than running a separate loan against each.

Seen this way, the products are not competing options but stages in a single life cycle: buy fast, build or improve, then settle onto cheaper term money once the risk has been taken out of the deal.

Common questions

Can you get a mortgage on an industrial unit? Yes. An industrial commercial mortgage is a mainstream product for both owner-occupiers and investors, on terms from five to twenty-five years. Approval depends on the unit, the income or trading accounts behind it, and the deposit, not on any special barrier to industrial as an asset class.

Is it difficult to get a commercial mortgage? Not unusually. The sector is well supported by lenders, and a clean deal with a sensible deposit and coverage is a routine approval. Difficulty comes from presenting the wrong deal to the wrong lender, which is exactly what a broker exists to prevent.

How much deposit will I need? Around 20 to 30 percent for an owner-occupied unit and 30 to 35 percent for an investment, remembering that a down-valuation increases the cash figure because lenders advance against the lower of price and valuation.

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Industrial Property Finance is operated by Lenzie Consulting Ltd, registered in England and Wales, company number 08174104. We are a finance arranger and introducer, not a lender, and we do not provide financial, legal or tax advice. Industrial property finance for limited companies, investors and business borrowers is unregulated commercial lending that falls outside the Financial Conduct Authority’s regulated-mortgage perimeter. Where a case would be a regulated mortgage contract, we refer it to an appropriately authorised firm. All rates, deposits and figures here are indicative, asset dependent and correct as at July 2026.