New figures released by HMRC reveal that the number of property purchases in 2016/7 were the highest for nine years.
In the tax year 2016/7, 127,280 commercial properties were sold. This is a 6% rise on the previous year’s total of 119,920.
The Royal Institute of Chartered Surveyors has disclosed that enquiries about commercial property rose by 18% in the first quarter of 2017.
One of the reasons for the rise is the weak pound, which has made investing in UK commercial property attractive for overseas buyers. UK commercial properties tend to have longer leases than most properties in European countries, and this can make investing in the UK market more appealing.
British people living abroad are also interested in purchasing commercial property in Britain.
Changes to the tax laws and increases in stamp duty have increased the cost for buy-to-let landlords. Many are reacting to this by diversifying into commercial property, as nonresidential property is not subject to the same increased costs. Landlords are particularly interested in restaurants, corner shops and takeaways, as these can often be purchased for a reasonable price and can provide high rental yields.
The National Landlords Association reported that 19% of landlords intend to take out a commercial mortgage to purchase commercial property. In July 2015, just 10% of landlords were intending to take out a commercial loan.
The demand for commercial mortgages is strong and with fierce competition among lenders, it is worth remembering that a broker can find good commercial mortgage deals for commercial property purchases.