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In short
Law firms usually buy their office with a commercial mortgage, but the key decision is who owns the building: the firm itself, the partners through a separate property LLP that leases it back, or a partners’ SSAS pension, which can borrow up to half its net value. Lenders assess the firm’s profits or the rent it pays, the length of any lease, and whether the building suits office use if the practice ever moved.
This page is for partners, members and directors of law firms who want to stop renting and own the building they practise from, or who have been offered the freehold by their landlord. Smart Funding Solutions is a broker, not a lender: we approach lenders on our panel of 300+ for commercial property and practice finance, from around £10,000 to £500,000+, with larger facilities available in suitable cases. For every other reason law firms borrow, see our solicitor practice loans hub.
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Solicitors are among the most settled commercial occupiers. A high street or market town practice may have been in the same building for decades, and that stability is what makes ownership attractive. The usual triggers are:
the landlord offers the freehold for sale, often at lease expiry or when retiring themselves;
a rent review or renewal would push rent above what a mortgage on the same building would cost;
the firm wants to make alterations a landlord resists, such as a ground floor meeting room for clients with mobility needs or a fire-rated strongroom for original wills and deeds;
the partners want a long-term asset for their pension, with the firm paying rent into it rather than to a third party;
a merger leaves two branches in one town and the combined firm wants a single building.
Illustration: a SSAS and partner purchase
Illustration only, with hypothetical round numbers and before purchase costs. A four-partner firm is offered its office for £500,000. The partners’ SSAS has £300,000 of net assets, so it can borrow up to £150,000. The SSAS buys a 70% share for £350,000, using £200,000 of its own funds and a £150,000 loan secured on its share. Two partners buy the remaining 30% personally for £150,000 with a commercial mortgage. The firm signs a 15-year lease at a market rent, split between the two owners in proportion to their shares, and that rent covers both loans. The SSAS keeps £100,000 in cash to stay liquid.
Risks and alternatives
Owning ties the firm to one building. If fee income falls or the firm merges and moves, the owners carry an empty office and the loan. A SSAS that holds most of its value in one building is concentrated and illiquid, which matters when members approach retirement and want benefits paid. Partner-owned property creates a second relationship between partners that must be unwound on exit; our page on solicitor partner buyouts covers the firm side of that. Commercial mortgages usually need personal guarantees where individuals or a property LLP borrow, and the building is at risk if repayments are missed.
The alternative is to stay a tenant and negotiate a longer lease with a rent-free period, keeping capital in the practice. If you are buying at auction or before long-term funding can be arranged, bridging loans can fill the gap but cost more and need a firm exit. If the building needs work after purchase, plan it alongside the mortgage; see law firm office refurbishment finance.
Underwriting
How lenders assess a law firm property purchase
Owner-occupier commercial mortgages are commonly offered at up to 70 to 75% of the property value, with terms often up to 25 years, though every lender sets its own limits. Within that, the points that matter for a solicitors’ office are:
01
The building itself
period townhouses and converted buildings are common for law firms; lenders look at listing, condition, access and whether the upper floors would let as offices if the firm left.
02
Mixed use
residential accommodation above the office reduces the number of lenders and rules out pension ownership of that part; the residential element is not something we arrange.
03
Affordability
for firm ownership, profits after partner drawings; for an LLP or pension owner, rent cover and the lease terms.
04
The firm’s stability
fee income trends, work type, partner succession and the length of the lease the firm will sign.
General information only. Every lender has its own criteria, and all finance is subject to status.
Choosing who owns the building
The ownership structure decides the lender’s approach, the tax treatment and what happens when a partner leaves. It should be settled with your accountant and solicitor before a lender is approached.
Owner
How lenders view it
Main advantage
Main drawback
The firm (company or LLP)
Owner-occupier mortgage assessed on the firm’s profits
Simple, one borrower
The building sits with the practice, complicating any future sale or partner exit
Partners personally or a separate property LLP
Investment-style loan assessed on the rent the firm pays under a lease
Separates property from the practice; incoming partners need not buy in
Partners give guarantees; exits need a co-ownership agreement
Partners’ SSAS or SIPP
Pension lending limited to half the scheme’s net value, secured on the property
Rent flows into a tax-advantaged pension
Strict rules on borrowing and connected parties; funds are locked in
For a limited company practice this is straightforward: the company borrows on a commercial mortgage and the building goes on its balance sheet. In a traditional partnership or LLP, owning the building inside the firm means every future partner inherits a share of property, and a retiring partner may expect to be paid for their share. That is why many law firm partnerships keep property outside the practice. Our limited company or LLP guide compares the two structures more broadly.
A separate property LLP owned by the partners
Some or all of the partners form a property LLP, which buys the building and grants the firm a lease at a market rent. Lenders then look at two things: the rent against the loan repayments, and the strength of the firm as tenant. The same firm is effectively on both sides, so a lender will want a properly documented lease rather than an informal arrangement. The benefit is that partners can join the practice without buying into the building, and the property LLP can keep its owners after they retire from practice.
A SSAS or SIPP
A small self-administered scheme set up by the firm, or the partners’ SIPPs, can buy commercial premises and lease them to the firm. Borrowing by a registered pension scheme is limited to 50% of the scheme’s net assets, the rent must be at market level and actually paid, and residential property is off limits, which matters where a period office has a flat above. HMRC sets out the rules in its guidance on tax on investments for pension trustees. Only some lenders lend to pension trustees, and they will want the scheme administrator involved from the outset.
How we arrange it
We confirm the ownership structure your advisers recommend and the deposit available.
We identify lenders on our panel with appetite for that structure, including pension trustee lending where relevant.
We compare terms, valuation requirements and guarantees with you, then submit to the chosen lender.
The lender instructs a valuation, underwrites and decides; we liaise with your solicitor and any scheme administrator through to completion.
For owner-occupier purchases outside the legal sector, see our general guide to buying business premises. It is free to enquire; any broker fee is disclosed separately before you proceed.
What our clients say
I’d like to say a big thank you to Simon and the team for successfully assisting with the sourcing and placing of our most recent funding. Simon was able to secure a lend when others appeared to have run out of appetite to place business or source viable options. I would highly recommend Simon should you need to raise capital or finance for your business needs.
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FAQs
Questions clients ask
Can our SSAS buy the office from one of the partners?
A SSAS can generally buy commercial property from a connected person, such as a member or the sponsoring firm, provided the price is supported by an independent valuation and the transaction is on commercial terms. Your scheme administrator and advisers need to confirm the details, and the lender will expect the same valuation discipline.
Can we borrow against an office the firm already owns?
Yes. A firm or partners who own the building outright or with a small mortgage can raise funds against it for another purpose, such as an acquisition or a partner exit. Our page on commercial property refinance covers remortgaging and capital raising.
Does a law firm need a deposit to buy its office?
Normally yes, because commercial lenders rarely advance the full value. The deposit can come from the firm, the partners or a pension scheme, and extra security, such as a charge over other property, can sometimes reduce it. Purchase costs, including Stamp Duty Land Tax, need to be funded on top.
What happens to a partner’s share of the building when they retire?
That depends on the co-ownership or property LLP agreement. Good agreements set out whether the other owners must buy the share, at what valuation and over what period. Where the building sits inside a SSAS, the retiring member’s interest stays in the pension and the question becomes how and when benefits are paid.
Can a law firm get office purchase finance with a short trading history?
Some lenders will consider a law firm with a shorter trading history, but most prefer a settled record of filed accounts for an owner-occupier commercial mortgage. Where the firm is newer, lenders lean more heavily on the partners' track record, their personal finances and a larger deposit. A firm formed by merger, or by partners leaving an established practice, can often show earlier figures to support its case. Our buying business premises guide covers the wider process.
Dental practice premises finance is usually an owner-occupier commercial mortgage used to buy the building a practice trades…
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