There’s a newsagents, a hairdressers, a small supermarket, and, for a year or so, one that had laid empty with a ‘for sale’ sign on the wall outside.
However, when the restrictions imposed during the first lockdown were gradually eased last summer, something strange happened. The sign was taken down, decorators and shop fitters moved in, and within weeks the place was re-opened as a takeaway, with a two-bedroom flat above it.
While the rest of the UK housing market was slowly getting back on its feet, someone had recognized the potential for the property as a takeaway and residential accommodation, and taken the plunge into the world of semi-commercial letting.
And by the look of the socially distanced queues stretching out of the door most nights as people patiently wait for their takeaways, it’s certainly been a successful investment.
If you’re not familiar with semi-commercial properties, or mixed use properties as they’re also sometimes referred to, they’re simply rental properties that combine residential properties with an element of commercial use.
This could include, for example, flats above shops, restaurants or offices; guest houses with accommodation for the owners; public houses with self-contained accommodation; or buildings with both self-contained flats and offices.
Professionalisation of the market
With the buy-to-let market becoming professionalised in recent years, interest in semi-commercial has increased as canny investors explore different property asset classes and look to adopt different investment strategies.
This could be a smart move.
In my opinion, with their potential to earn higher rental yields compared to a standard buy to let, semi-commercial properties could give experienced landlords a different way to maximise their investments and provide a useful stepping to investing in the commercial property market.
I believe they also offer a way to mitigate risk as if a landlord experiences issues with one property, the performance of others in their portfolio can make up for any shortfall in rental yield.
Of course, as with any investment, there are things which landlords need to take into careful consideration before making the move into semi-commercial. The initial outlay and running costs can be higher compared to a standard buy to let, and a vacant commercial space will still incur business rates.
Another problem landlords may encounter is finding a mortgage with a lender experienced in dealing with semi-commercial cases. Semi-commercial can be complex as they fall into the middle ground between commercial and residential borrowing.
The good news is that there are lenders out there who specialise in semi-commercial mortgages and who can offer products specifically designed to meet the needs of investors.
With landlords constantly looking for new investment opportunities, semi-commercial letting could offer them the ideal way to diversify their portfolio.
And with the right lender on their side to help them make the move into a new market, they could soon be benefitting from the best of both the commercial and residential worlds.