Demand for UK commercial property rises

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According to the Royal Institute of Chartered Surveyors (RICS), the UK property market is in good shape, with demand for industrial property was stronger than for offices or retail premises.

A article from April 2017 states that the RICS surveyed commercial property agents and developers. Although demand had increased for all types of commercial property, industrial space demand outweighed that for retail and office premises. Demand from overseas investors also increased.

The chief economist of the RICS, Simon Rubinsohn, commented:

“The results of the latest commercial property survey chime with much of the recent generally more positive economic news flow. The forward-looking indicators are also proving relatively resilient, although it would not be a surprise if activity slows somewhat ahead of the forthcoming general election.”

Due to high demand, commercial industrial property rents are expected to rise. There should be more modest rent rises for office space, while retail rents remain steady.

Commercial mortgage interest rates to finance commercial property deals remain low and there are numerous mortgage deals available through using a commercial mortgage broker.

The demand for commercial mortgages for buy-to-let residential property has remained static. Landlords have seen their costs increase due to the reduction in the amount of tax relief they can claim on buy to let commercial mortgage interest payments, which has caused some landlords to diversify their property portfolio by investing in semi-commercial and commercial property. Yields from rental income can be higher in commercial property and tenants tend to stay longer.

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