Scott Marshall (pictured), managing director at Roma Finance, commented: “We’re seeing many landlords looking to diversify their portfolios and some are investing in semi-commercial units for the first time. They are keen to take advantage of tax efficient property types and also have another string to their bow when it comes to spreading tax risk.”
He continued: “With a retail unit and a residential flat above, they are getting longer tenancies for the shop and good rental prices for the flat. We’ve funded conversions where separate entrances have been created for the different parts of the property and occasionally the exit route for the bridging loan has been to sell one of the units and retain the other.”
Roma Finance said a £500,000 residential buy to let property would incur stamp duty of £30,000, whereas for a commercial or semi-commercial property of the same value the stamp duty would be £14,000.
The lender said that mixed use properties had the potential to create additional flexibility for landlords, enabling them to let to different types of tenants and giving them the option to sell to different types of buyers when exiting the investment.
Marshall added: “Landlords and property investors are putting in place a variety of strategies to protect their portfolios from increasing taxation and semi-commercial property has a definite role to play in this as they look for new opportunities.”