Property investors, and landlords specifically, are facing pressure from multiple angles. We’re all aware of the upcoming Renters’ Rights Bill. Among other things, it’s set to hike up costs, add administrative challenges, and generally force landlords to be much more involved with their investments.
Generally, this bill primarily concerns residential landlords. But fresh legislative changes are on their way which may dramatically impact commercial landlords.
The government recently unveiled its plans for how it may fine commercial landlords who fail to engage with local councils who target their premises for a potential auction.
Under a new initiative, councils can step in to auction off leases for commercial premises that have been left vacant for more than a year. While there is a certain amount of leeway in how owners can work with their local authorities, those who fall foul of the rules can be fined up to £2,500 if they’re not careful.
For some, this may be the final nail in the coffin. Rather than deal with the challenges of trying to turnaround a long-vacant space, they may sell-up to exit the market.
We’ve already seen this occur within the residential market, it’s reasonable to assume that the commercial market may soon be swamped with more stock too.
This, of course could create opportunity for expanding property investors. Indeed, according to the latest data from Essential Information Group, auction activity rebounded in April, with the number of lots offered up 17% year-on-year.
Residential volumes drove much of the activity, but commercial auctions are standing out, with sales up 48.1%, and the total raised rising by 35.6% year-on-year.
This indicates that more commercial owners could be turning to auctions to offload their assets quickly, and that some property investors are taking advantage of this. Should this continue, there could be growing demand for specialist auction finance that’ll allow bidders to get ahead of their competition.
These bidders and buyers do not need to stick with the underutilised commercial space they’ve invested in either. Many are embracing thinking outside the box, with CBRE finding that nearly £3.5bn of unloved commercial space was bought by those who intended to convert it into a range of alternative asset types between 2022 and 2024.
Again, specialist finance can help here, with funding available for a broad range of conversion options.
Regardless of where opportunity arises in the property market, specialist lenders will be there to help investors take advantage of it.
