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Residential vs. Commercial

The London property industry took a huge thump during the height of the national and global recession. As it climbs back to its proverbial feet in 2013, the comparison between residential and commercial property available to rent in London makes for interesting reading.

The level of commercial space available to rent in London increased with the surge of interest in last year’s Olympics. Tourism hit record heights, restaurants opened for extended hours and more people found employment in retail. The first quarter of 2013 highlighted moderate stability in the commercial rental sector, indicating huge strides on the ailing results of the last decade.

A combination of flourishing minor enterprises and a lack of purchasing capital for larger firms resulted in the rise of commercial rental across London. It is a good time to own office space and provide rent with premium rates currently available for city centre locations. There is a particular popularity for short term lease holding for businesses on the move constantly.

The residential letting market benefited from the lack of mortgage opportunities in recent years, and 2013 has demonstrated a decrease in rental prices directly related to the slight recovery of the housing market. With the average apartment rental still in excess of £850 profitability remains high for landlords, but with extra overheads creeping into ageing properties the London market remains a balancing act.

A quick comparison between the current marketplaces demonstrates that commercial rental continues to yield strong results for landlords with the obvious savings on repairs, utilities and tax. The residential marketplace maintains popular among travellers and visitors with holiday apartments on the rise across the UK. These short term stays can net landlords quality streams but does require a solid marketing portfolio.

What does the fall of 2013 have in store?

With many landlords attempting to escape the pressures of the marketplace it does leave scope for those looking to be ambitious. For example landlords are now trying combination commercial and rental opportunities; consisting of work at home business premises including converted boardrooms, guest rooms and hybrid living quarters. It is the ace up the sleeve for astute landlords looking to pitch their London property for the most glamorous price.

The future of the residential market appears stable with a recent influx of developers joining the party after years in the wilderness. The level of investment from larger investors has decreased but the number of buy to let sales continues to rise in urban fashionable areas.

It is a buyer’s marketplace currently so most experts advise property investors to act now as house prices are set to rise. Don’t be left short and miss the chance to set up a new portfolio.

If you are a landlord looking to land new mass business tenants or simply a small two bedroom apartment for a nice side earner, the opportunities look bright as we enter the tail end of 2013. Perhaps the appointment of a fresh thinking Bank of England chief will ignite further investment into the London property market bringing it with a new generation of landlords.

1 Comment on "Residential vs. Commercial"

  1. Locating your office in a residential building may have its advantages, but I still prefer commercial space. They are just better optimized for businesses – more space, work atmosphere and most of all better for holding meetings with clients and partners.

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