England home to £1.8bn worth of mixed-use property opportunities – West One Loans – The Intermediary

England currently has almost £1.8bn worth of mixed-use property opportunities available to investors, with listing volumes rising as the market shows signs of recovery, according to research from West One Loans.

The specialist property finance lender analysed mixed-use property listings across England and found there were 3,899 properties on the market in April, with an average asking price of £452,681 and a combined market value of £1.77bn.

London accounted for the largest share of available stock, with 663 mixed-use properties listed for sale, representing 17% of the national total.

The capital’s mixed-use market is worth an estimated £599.1m, with an average asking price of £903,628.

The South East ranked second, with a combined market value of £310.5m, followed by the North West at £156.5m.

West One Loans found the North West recorded the strongest annual growth in available stock, with mixed-use listings increasing by 23.1% year-on-year.

London also saw a significant rise, with listing volumes up 14.9%.

Across England as a whole, the number of mixed-use properties listed for sale increased by 5.6% compared with the same period last year.

The North East remained the most affordable region for mixed-use acquisitions, with an average asking price of £181,093.

Duncan Abraham, regional director at West One Loans, said: “Mixed-use property remains an important part of the market because it can offer commercial investors and developers greater flexibility, stronger yields and multiple routes to generate value.

“In many cases, these assets provide commercial investors with the opportunity to acquire an under-utilised building with an existing commercial element, whilst also benefiting from the strong demand we continue to see for residential space.

“For developers, there is often clear scope to enhance the value of a mixed-use asset through light refurbishment, reconfiguration or redevelopment.”

Abraham said mixed-use opportunities can be particularly attractive where the residential element accounts for the majority of a scheme’s value.

He added: “At West One, our development lending is residential-led, which means the residential aspect of a scheme must account for at least 65% of the total value.

“Where that is the case, mixed-use opportunities can be particularly attractive to commercial investors, especially because we calculate lending against the vacant possession value of the asset.

“This can allow borrowers to unlock greater leverage where there is a clear plan to improve the property and increase its value.”

Abraham said developers are increasingly seeking funding partners capable of supporting projects from acquisition through to exit.

He added: “We are also seeing more developers look for a funding partner that can support the entire lifecycle of a mixed-use scheme.

“That could mean providing the initial development funding and then supporting the long-term exit via a buy-to-let mortgage where the completed scheme remains predominantly residential, or a commercial mortgage where the asset retains a stronger commercial element.”