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Landlords abandoning single lets in search of higher yields - bank data

Landlords are increasingly turning towards semi-commercial property, a bank says.

Shawbrook says its semi-commercial applications have almost doubled in 2024 compared to 2023.

Despite only being halfway through the year, Shawbrook revealed that 2024 has already seen 24% of semi-commercial applications for new purchases compared to just 13% in 2023. 


This comes as the market has become less volatile in recent months, giving rise to investors expanding portfolios with higher yielding assets. 

The South East, in particular, has been an attractive target for investors with two-fifths (39%) in 2024 looking towards the region compared to a quarter (27%) in 2023, according to Shawbrook’s application data.

Looking further into the kinds of properties landlords have invested in, 60% sought retail spaces with flats above. 

For small investors, many of these assets also come with future value generation potential through the use of permitted development rights to add residential units. 

Daryl Norkett, Director of Real Estate Proposition at Shawbrook comments: “Property investors are adapting to a higher interest rate environment with portfolio landlords taking the opportunity to grow their businesses with a wider range of assets. 

"We’re already seeing this in the applications we’ve been receiving recently, with investors looking towards property types like HMOs, social housing, and semi-commercial properties that tend to offer higher rental yields than traditional single lets.

“These opportunities are property specific but can be very attractive to investors. Semi-commercial properties in particular have the added benefit of having both commercial and residential space, meaning that landlords can enjoy higher yields with a mix of income streams. 

“Those interested in exploring the semi-commercial market or diversifying their portfolios should speak to a broker to better understand their options.”

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    Utter tripe! Shop based retail is dead.
    Small shops are a liability. Mixed/ commercial residential doesn’t work well and ‘development rights’ only offer scope if you can take out the ‘ the commercial element ( usually a small shop).
    Higher yield? Err No!


    I have a couple of shops fully let at present but they are a job to find tenants for when they become vacant, I had more but have converted those to homes now, they are not high yielding, you have to be very competitive with the rent to find and keep the tenants

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    A hundred years ago all shops had living accommodationabove, usually occupied by the shopkeeper. Times have changed. People no longer shop daily, preferring to use big stores with parking, or shopping online. Most High Streets are occupied by charities and estate agents.


    And coffee shops

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    The double yellow lines came, the traffic warden came, the internet came, Amazon came, home deliveries came, the guy on income support on the moped came with your breakfast, dinner & supper came which is why you are over weight, yes computerisation came, the shops closed, the bank closed, the pub closed, supermarkets came, licensing Scheme came thanks to computers or it wouldn’t have happened, talking machines replaced humans etc, don’t need to go 100 years 20 years will do.


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