Investors prefer commercial properties - commercial mortgages

16 February 2007

Investors are increasingly choosing "low-hassle" commercial properties over investments in the residential buy to let sector, according to a new report.

A study by Assetz found that many people, including those considering commercial mortgages, believe that the market will provide higher rental returns than the private rented sector.

The firm stated that commercial property investments often see a lower turnover of tenants, while occupiers have a legal responsibility to maintain the property - offering investors less of a "hands-on" experience.

Stuart Law, managing director at the firm, said: "Entry-level commercial property is becoming a popular choice for British investors, particularly in the north-west where the price is clearly low given the potential for high earnings on the property."

In its latest monthly figures, the Investment Property Databank reported that commercial property provided investors with a 0.7 per cent return in January.

Additionally, the firm found that rental value growth within the sector was 0.2 per cent last month.