Brokers and commercial lenders are reporting that demand for commercial mortgages remains strong. Although there continues to be much speculation about the future of the housing market in general the commercial property sector appears to be quietly carrying on regardless.The value of most commercial property is underpinned by the rental yield that it can generate, given that the majority of commercial property is still not owner occupied there is plenty of scope for the market to change.
When looking at the various statistics for commercial property values it is worth bearing in mind the huge variety of property types that this can cover. A commercial property can be any one of the following:
- Pubs and Restaurants
- Hotels, B&B’s and Guesthouses
- Lock-up retail units
- Fast food outlets
- Factories
- Offices
- Mixed use units.
If you compare the range of different property types with the variation in demand across geographical areas you can imagine how difficult it is to arrive at a solid valuation. It is not as simple as checking the number of bedrooms against a postcode on RightMove!
Demand for commercial property is also being fueled by the number of buy-to-let investors looking to protect their incomes by adding some variety to their portfolio.
The question as to whether this demand will continue will probably be a reflection of the economy as a whole.