Investors look to make their money work harder
Mixed-use and commercial property attracting more investors, says Hertfordshire finance brokerage
Press Release – Monday, August 22, 2022
Property investors are looking to get more bang for their buck by moving into mixed-use and commercial property investment while the number of people looking for finance to build their own homes has rocketed more than tenfold.
Recognising the increased yield from premises that include residential accommodation and commercial space, more investors are expanding their portfolios from traditional buy-to-lets into this growing market.
Commercial finance brokerage Omega has seen an 18 per cent rise in the number of investors looking for funds for mixed-use property, including many where this would be their first semi-commercial or solely commercial investment. Mark Jones, Director of the Hertfordshire-based group, said: “Clients are looking to make their money go further and expanding or diversifying their property investment portfolio rather than sticking with vanilla buy-to-lets.
“Not surprisingly, they want to get the best returns from their deposits and investors are making their cash work harder for them. We are seeing more and more people shifting from the traditional investments and looking at property they can either add value to through refurbishment or switching to commercial and mixed-use asset classes.”
Mr Jones was reflecting on the first half of the year which also saw an increase in value-add projects such as refurbishments and conversions.
He said there had also been an increase in the number of people who had failed to find their dream home to move into and were now turning to building their own. Omega has seen a 1,133 per cent increase in the number of residential development deals since before the pandemic.
“It has definitely been a trend that started during 2020. Residential development transactions has now comfortably become a far more significant portion of the deals we arrange for clients.”
He believes the increase in mixed-use and commercial investment deals will be an ongoing trend with the predicted hike in interest rates impacting heightened debt options available for more traditional property investment.
“There are challenges ahead and, without doubt, interest rates and the resulting impact on debt service requirements will certainly be among them.”
“Getting a deal over the line is also taking more time. We continue to work harder for our clients than ever before, not just in providing the most competitive terms from a wider spread of lenders, but also in managing the full mortgage process, liaising with all participants and delivering for our introducers and clients alike.”