Diversifying into commercial property emerges as alternative
Forty percent of landlords surveyed by the NRLA have either purchased or are thinking of buying commercial property.
Diversifying portfolios, as a result of the impending Renters’ Rights Bill and potential changes in Minimum Energy Efficiency Standards (MEES), suggests some landlords are no longer convinced conditions are in place for their business in residential property to thrive.
The same survey, of more than 1,200 landlords, found a further 15% of landlords are planning to sell up and leave the market.
Of those who had considered diversifying or already have commercial property in their portfolio, over a third (35%) said that it was likely to become more important in their portfolio.
Lack of experience
According to the survey, more than half (55%) of landlords who had considered diversifying into commercial property but not yet done so cited a lack of experience.
A further 36% were concerned over risk versus return.
The NRLA’s Chris Norris, Campaigns and Policy Director, says many landlords are waiting for the Renters’ Rights Bill to become law before committing to their future plans.
“I expect a lot of landlords to be sitting on their hands for the next 12 months, just while the regulations come in, while they find out what MEES looks like,” he told me.
“I haven’t seen enough evidence of private landlords moving that way [from residential property to commercial] yet. But commercial property has not been particularly lucrative for the last five to six years.”
Find out more
You can find full details on our survey results on our research pages.
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