Former Prime Minister Tony Blair and his wife Cherie have a property portfolio of 38 homes. They are in the process of purchasing their first commercial office building.

Many landlords faced with rising costs because of increased stamp duty and cuts to mortgage interest tax relief are looking to diversify. Investing in the commercial property market is one way to do this.

The Blairs operate their property company and foundations from London offices. Their office building is being redeveloped so they have decided to purchase a London house worth around £5m to re-house their offices. They have recently taken out a commercial mortgage with the bank Coutts in order to purchase a four-storey Victorian terrace house that they will use as office space. The Blairs will be the only tenants.

A spokesperson for the Blairs said that buying the building was the most cost-effective way of relocating offices.

The homes that the Blairs currently own are worth £33m. With the office building, this brings their total property value to £38m.

There is no indication that the Blairs will diversify their property portfolio by purchasing other office buildings, but this is a strategy that many landlords are considering. There is a high demand for commercial office space. Rents are high and tenants tend to take out long leases.

The cost of purchasing office properties is generally higher than that of residential buy-to-let property, but rental yields can be higher, and high capital growth may be achieved.