In a striking shift in the property market, landlords are increasingly eyeing semi-commercial properties, with applications nearly doubling in 2024 compared to the previous year.
Fresh data from Shawbrook highlights this trend, revealing a significant jump in semi-commercial property applications for new purchases. As of mid-2024, these applications account for 24% of the total, up from 13% in 2023.
This surge coincides with a recent stabilization in the market, prompting investors to diversify their portfolios with higher-yielding assets.
Particularly, the South East has emerged as a prime target for these investments. Shawbrook’s data indicates that 39% of applicants in 2024 have set their sights on this region, a notable increase from 27% in 2023.
Breaking down the types of properties attracting landlords, 60% have sought retail spaces with residential units above. For smaller investors, these properties present opportunities for future value enhancement through permitted development rights, which allow for the addition of more residential units.
Daryl Norkett, Shawbrook’s Director of Real Estate Proposition, commented on the trend: “Property investors are adapting to a higher interest rate environment by expanding their portfolios to include a broader range of assets. The applications we’ve been receiving reflect this shift, with a growing interest in property types such as HMOs, social housing, and semi-commercial properties that typically offer higher rental yields than traditional single lets.”
As landlords navigate this evolving landscape, the move towards semi-commercial properties underscores a strategic response to market conditions, highlighting the dynamic nature of property investment in 2024.