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Landlords eyeing semi-commercial properties, says Shawbrook

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  • 03/06/2024
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Landlords eyeing semi-commercial properties, says Shawbrook
Landlords are turning towards semi-commercial properties, with applications nearly doubling in the first few months of 2024 compared to the same period last year, according to a lender.

Shawbrook says that, so far this year, applications for semi-commercial properties make up 24% of new purchases, a rise from 13% in 2023.

The lender said that the market has become “less volatile” in recent months, which has led to investors growing their portfolios with “higher-yielding assets”.

The South East was the most popular region for applications, with 39% of investors looking at this area. This is up from 27% in 2023, according to Shawbrook’s figures.

Around 60% of investors looked for retail spaces with flats above them, with the firm noting that, for small investors, these assets could have “future value generation” due to permitted development rights to add residential units.

Daryl Norkett, director of real estate proposition at Shawbrook, said: “Property investors are adapting to a higher-interest-rate environment, with portfolio landlords taking the opportunity to grow their businesses with a wider range of assets.

“We’re already seeing this in the applications we’ve been receiving recently, with investors looking towards property types like houses in multiple occupation [HMOs], social housing, and semi-commercial properties that tend to offer higher rental yields than traditional single lets.

“These opportunities are property-specific but can be very attractive to investors. Semi-commercial properties in particular have the added benefit of having both commercial and residential space, meaning that landlords can enjoy higher yields with a mix of income streams. Those interested in exploring the semi-commercial market or diversifying their portfolios should speak to a broker to better understand their options.”

An analysis by this publication earlier this year revealed that commercial mortgage enquiries were rising.

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