This is according to the latest data from Shawbrook, which reveals that despite only being halfway through the year, the lender has already seen 24% of semi-commercial applications for new purchases compared to just 13% in 2023.

This comes as the market has become less volatile in recent months, giving rise to investors expanding portfolios with higher yielding assets.

The South East, in particular, has been an attractive target for investors with two-fifths (39%) in 2024 looking towards the region compared to a quarter (27%) in 2023, according to Shawbrook’s application data.

Looking further into the kinds of properties landlords have invested in, 60% sought retail spaces with flats above. For small investors, many of these assets also come with future value generation potential through the use of permitted development rights to add residential units.

Shawbrook director of real estate proposition Daryl Norkett commented: “Property investors are adapting to a higher interest rate environment with portfolio landlords taking the opportunity to grow their businesses with a wider range of assets. We’re already seeing this in the applications we’ve been receiving recently, with investors looking towards property types like HMOs, social housing, and semi-commercial properties that tend to offer higher rental yields than traditional single lets.”