Owner-Occupiers Drive Resilient Commercial Property Market
Buying Becomes 37% Cheaper Than Renting
The latest Commercial Property Demand Index from specialist property finance expert, Rangewell, reveals that while investor appetite across the sector held steady in Q2, strong levels of owner-occupied commercial mortgage activity are helping drive market performance, as business owners increasingly move from renting to buying their long-term premises for their operations whilst reducing monthly costs.
The two the main drivers of owner-occupied demand are
Monthly mortgage payments are now significantly lower than commercial rents which means businesses can reduce costs while building equity in their own property
Taking full control of their single most critical asset gives them much greater stability and control
Rangewell analysed current demand across the commercial sector by looking at the proportion of each property type listed for sale that had already secured a buyer during Q2.
The results show retail properties are leading the way, accounting for 27.8% of total demand, followed by offices at 27.3%, and industrial/warehouse units at 26.2%.
Although the current level of demand seen across the market remained largely unchanged versus Q1, leisure and hospitality stood out as the only segment to see positive growth, with demand rising by 0.7%.
Specialist sub sectors such Specialist Care, Dental and Children’s Day Nurseries also showed strong movement away from renting to Owner Occupied.
However, whilst the commercial landscape may have remained somewhat static with respect to new buyer activity, Rangewell has noted a surge in enquiries and completions for owner-occupied commercial mortgages, as established businesses seek to safeguard their operations and avoid rising rental costs by purchasing their own premises — from retail units and warehouses to offices and industrial spaces.
Alasdair McPherson, Commercial Property Expert at Rangewell, commented:
“When business owners realise that mortgage payments can be up to 37% less than rental payments – and they’re building equity value in their property at the same time, the case for buying becomes obvious.
It’s astonishing how often an owner-occupier can buy their freehold property and still pay less each month than they do leasing the same building
The commercial market remains resilient, with retail and office properties proving most attractive to buyers. But what’s really fuelling activity beneath the surface is the increasing number of business owners looking to purchase their own premises.
With commercial mortgages tailored for owner-occupiers, many businesses are making strategic decisions to invest in their future, take control of their location, and build long-term value.
From our perspective, the Commercial Owner-Occupied sector has never been busier and lenders are lining up to grow their share in what’s fast becoming the most competitive segment in the sector.”
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