Professional landlords in the UK increasingly focused on higher-yielding investments in 2024, as evidenced by a significant rise in applications for semi-commercial and commercial property purchases, according to new internal data from Shawbrook. While total application volumes remained stable, diversification became a key theme for landlords seeking to bolster returns amid challenging market conditions.
Semi-commercial property applications accounted for 31% more of total activity year-on-year, while commercial property applications grew by 28%. This trend reflects a calculated shift by professional landlords towards asset types with greater yield potential.
Alongside this diversification, refinancing patterns reveal a cautious strategy in managing existing portfolios. Shawbrookâs data shows an increase in refinancing applications without capital raising, while refinancing with capital raising declined. This indicates a deliberate move by landlords to manage debt amid high-interest rates, opting for fixed-rate security through initiatives like Shawbrookâs âSwitch & Fixâ.
Daryl Norkett, director of real estate proposition at Shawbrook, said, â2024 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.â
He added that landlords seeking stability have leaned heavily on fixed-rate product transfers to manage their portfolios effectively: âOur âSwitch & Fixâ offering has been instrumental in helping landlords achieve this balance, and we have more exciting plans in 2025 to support professional landlords manage and grow their portfolios.â
