Landlords are increasingly investing in semi-commercial property due to its exemption from the 3% stamp duty surcharge.
Bridging lender Roma Finance has seen a 50% increase in enquiries in the last six months for property that combines residential and commercial – while more deals are in the pipeline or set for completion.
Scott Marshall, managing director at Roma Finance, said: “We’re seeing many landlords looking to diversify their portfolios and some are investing in semi-commercial units for the first time. They are keen to take advantage of tax efficient property types and also have another string to their bow when it comes spreading tax risk.
“With a retail unit and a residential flat above, they are getting longer tenancies for the shop and good rental prices for the flat. We’ve funded conversions where separate entrances have been created for the different parts of the property and occasionally the exit route for the bridging loan has been to sell one of the units and retain the other.
“Landlords and property investors are putting in place a variety of strategies to protect their portfolios from increasing taxation and semi-commercial property has a definite role to play in this as they look for new opportunities.”
Popular mixed-use property Roma have recently lent on includes a retail or workshop unit with flats above and pubs with a residential house attached.