According to property auctioneers Allsops, many buy-to-let landlords are finding commercial property a lucrative investment.
Faced with rising costs due to an increases in stamp duty, as well as reductions in tax relief on commercial mortgage interest payments, buy-to-let landlords are looking to diversify their investments by purchasing commercial property.
In March 2017 on the website PropertyInvestorToday.co.uk, Duncan Moir, partner at Allsops, has commented on landlord’s’ interest in commercial property. He explained:
“In a low interest-rate environment where higher rates of tax are hitting returns for residential buy-to-let investors, the commercial property market is becoming increasingly attractive.”
For a March 27th sale in London, Allsops has listed 161 lots – including 95 retail premises, 8 office buildings, 8 industrial lots and mixed use properties – at prices ranging from £5,000 to £4.4m. The total value of rents from the properties on sale is £8.5 million.
During the company’s last sale in February, Allsops sold £60m worth of commercial property. The auctioneers have noted a trend towards acquiring retail properties that have good tenants on long leases.
Some of the commercial properties were previously offered on a private sale, but remained unsold until offered at auction.
Buy-to-let landlords who want to switch to commercial property will find no shortage of potential investments at auctions. The completion of the purchase of auction properties must be done within a few weeks, but there are many specialist lenders who will provide short-term bridging loans until commercial mortgage funds are available.