Demand for commercial property rises from buy-to-let landlords
The Royal Institute of Chartered Surveyors has reported that demand for commercial property in the UK has risen in 2017, according to an August 2017 article by LandlordNews.co.uk.
Some of the increased demand for commercial properties comes from landlords whose buy-to-let profit margins have been reduced by increased stamp duty and taxes. Investing in commercial property can bring higher rental yields than residential accommodation.
There is a wide range of commercial property available including shops, offices, warehouses and semi-commercial mixed use property.
Some commonly cited disadvantages of investing in commercial mortgages include the increased costs (as commercial premises tend to be larger than residential ones) and the difficulty in assessing value without professional guidance.
Landlords purchasing commercial property to lease to tenants need to be aware that how interest rates are charged for mortgages for commercial property is different to buy-to-let mortgages. The interest charged is based on the value of the property, rental rates and the type of business occupying the property. If there is an existing tenant, the length of the lease will be considered. Most first-time commercial landlords will benefit from financial advice to choose the most profitable investments.
A good commercial mortgage broker will help landlords with the commercial mortgage application process. They can assist borrowers prepare the required documentation. A broker will know of lenders who specialise in the various commercial property sectors and find the most suitable deals for their clients.
Please note that we are a credit broker, not a lender.