New data reveals professional landlords have diversified their portfolios over the past 12 months to boost profits. What opportunities are available to you, and what trends do we expect this year?
As the property market offered up its fair share of challenges in 2024, from rate rises to legislation, it’s no surprise that professional landlords moved their focus from ‘vanilla’ buy to lets to higher-yielding property types. In fact, applications for semi-commercial and commercial property purchases made up a large share of purchase activity last year.
The latest landlord trends
According to specialist lender Shawbrook Bank, overall application volumes remained steady in 2024, but professional landlords showed a growing appetite for portfolio diversification. Semi-commercial purchase applications rose by 31% year-on-year, and commercial property purchases increased by 28%.
This shows a clear movement towards the higher-yield property investment types to reap the best rewards. Professional landlords can see the opportunity in this market and opt to take the jump rather than staying strictly in the residential buy to let market.
A diverse property portfolio is a fantastic way to manage your investment journeys. It not only helps you grow your experience and invest in more complex property types, but it also helps you maintain profits should one of your properties experience a rental void period.
Shawbrook’s data also reveals that landlords are being more cautious with their portfolio management. Applications for standard refinancing increased across all property types as the number of remortgage applications with a capital raise dropped. Furthermore, product transfer activity as an industry has grown to unprecedented levels in the last 12 months as borrowers prioritise keeping costs down to optimise their portfolios.
Industry comment
Daryl Norkett, the Director of Real Estate Proposition at Shawbrook, commented: “2024 was the year of diversification for professional landlords. We saw them shifting their focus towards higher-yielding opportunities like semi-commercial and commercial properties, demonstrating their resilience and adaptability in a challenging market. Clearly many professional landlords are adapting to market conditions with a clear strategy.”
He added: “At the same time, the more cautious landlords are focusing on managing existing debt carefully, securing stability through fixed-rate product transfers to continue to manage and grow their property businesses.”
Diversification Opportunities in 2025
We’re confident this trend will continue over the next 12 months as landlords look to boost their portfolio profits and keep costs down.
It’s important to start considering your next property investment venture. Semi-commercial properties will be on the rise due to their stamp duty exemption, but there are plenty of other commercial investment opportunities on offer. Furthermore, we expect bridging finance to continue to grow in popularity and allow many new landlords to enter the commercial property market.
What next?
If you would like to discuss a new commercial property investment opportunity, our team is ready to help. With plenty of experience and an exceptional understanding of the commercial market, we are best placed to discuss your plans and help you access the best mortgage rate to suit your needs.
Get started here or call us on 0345 345 6788.
