Is commercial property the answer for investors?

An increasing amount of landlords are turning their backs on residential property. Choosing instead to focus on retail units and small commercial developments, which do not have the same tax implications.

Research has revealed that the acquisition of commercial units is becoming more popular. This is following the relaxation of rates on business and retail units, as well as permitted development rights having been made permanent.

Unlike the stamp duty levy now held against residential purchases, commercial or semi-commercial properties are not subject to the 3% hike. Instead, there is a 0% band up to £150,000, 2% above this to £250,000 and 5% for properties over £250,000. Many residential landlords are now applying to finance this type of investment as an alternative way to grow their existing property portfolio.

As well as being a better option for an initial purchase, commercial property can also offer a more appealing prospect on a long term basis. Commercial tenants are often looking to commit to a lease for the long term, ensuring that a landlord can rely on a regular income stream with no ‘down time’ whilst looking for new tenants.