There are an increasing number of businesses that are looking to buy business premises instead of renting. Savills estate agents have reported a steady increase in the number of enquiries they have had from businesses looking for offices for sale.
Jacquie Morton, of Savills’s business space agency in Scotland said:
“It is a long way off becoming a more popular option than renting, but interest is picking up.”
She said that the reasons for this include the high cost of renting offices and the availability of many commercial mortgage products. She commented:
“Rents are getting more expensive and many business owners don’t see the merit in paying the money out to someone else.”
Savills has reported that commercial property investment in the UK was up 66% in January 2017. Many of these property purchases are for investors but there is a rising number purchased by businesses for their own use. As well as saving rent, a building is an asset on the company’s books, which can rise in value over the years.
There are many alternative or challenger banks that specialise in commercial mortgages and they have a number of attractive mortgage offers for companies that want to buy property. Some lenders are offering a 5 to 7 year fixed interest rate commercial mortgage. These attract borrowers who are concerned about possible increases in the Bank of England base rate. Fixed rates also mean that accurate budgets for mortgage payments can be used in a business plan.