The number of buy to let landlords who are purchasing commercial and semi-commercial property has increased by 300% over the last few years.
Olivia Rudgard, writing in the Daily Telegraph, stated these figures. With extra stamp duty charged last year and the upcoming changes to the tax rules putting off many buy to let landlords, some are switching to investing in commercial property such as restaurants and offices. They are also attracted to semi-commercial shops and hotels that combine residential accommodation with business premises.
George Walker of auctioneers Allsop has noticed a significant increase in buy to let landlord’s purchasing commercial property at their auctions. He said:
“We’re getting a lot of investors into our market because of the changes to buy-to-let. Once they have bought one, they can’t believe the simplicity and want to do it again.”
Graham Chivers who has been a residential property landlord for 30 years. He is not buying any more residential property because of the higher costs involved, but is committed to commercial property investing instead.
Rudgard says that there are good profits to be made from commercial property. Another advantage is that commercial tenants tend to stay longer and often undertake their own repairs.
Commercial mortgages for commercial property are available at low rates of between 5% and 8%. Rudgard says that loans for first time commercial property buyers are difficult to obtain from high street banks. A broker can arrange a commercial mortgage from an independent bank.