Landlord interest in semi-commercial and HMO properties has surged, according to Shawbrook analysis of its own data.
In the first six months of the year, Shawbrook recorded a 58% year-on-year increase in loan applications regarding the former.
At the same time, applications for the latter increased by 32%.
When it comes to the types of property types landlords are investing in, retail space above flats is continuing to prove the most popular option.
Over two thirds (69%) of landlords have opted for this type of commercial property in H1, up from 60% the year prior. For smaller investors, many semi-commercial assets also come with a future value generation through the use of permitted development rights to add residential units.
As well as semi-commercial property, HMOs are also increasing in popularity. HMOs made up 26% of Shawbrook’s BTL business, a slight increase from 25% in the first half of 2024.
“It is no surprise that semi-commercial properties are in demand, largely thanks to the benefit of having both commercial and residential space, meaning that landlords can enjoy higher yields with more diverse income streams,” said Daryl Norkett, director of real estate proposition at Shawbrook.
“It is particularly encouraging to see more purchase business in the market as it indicated committed property professionals are expanding their businesses.
“HMOs require more intensive management but continue to offer good income when well run, and also give landlords the ability to pass through increases in market rents more quickly as tenants more regularly turnover.”
