As buy to rent increases in popularity even throughout the pandemic, we are left wondering how to categorise these properties, residential or commercial?
When you look at the cost of buying a house and compare it to the increase in income, despite stronger wage growth in recent years it just cannot keep up. According to PropertyVire, the average first time buyer pays £209,163 on an annual net salary of £23,643. If we consider that banks lending criteria, which is set at an absolute limit of 4.5 times the income of applicants by the UK’s Financial Conduct Authority, it is unsurprising that many just cannot raise a mortgage to buy their own home.
This in turn leads to those who have the capital to invest in property to turn to buy to rent. Demand for housing is ever increasing and if mortgages are too difficult to obtain, rental may be the only option. Legislation was passed which allowed offices to be converted into housing without planning permission for a change of use in the permitted development rights, as needs alter.
[ rez-i-den-shuhl ]
- of or relating to residence or to residences:a residential requirement for a doctorate.
- suited for or characterized by private residences:a residential neighborhood.
[ kuh–mur-shuhl ]
- of, relating to, or characteristic of commerce.
- engaged in commerce.
- prepared, done, or acting with sole or chief emphasis on salability, profit, or success:a commercial product; His attitude toward the theater is very commercial.
- able to yield or make a profit:We decided that the small oil well was not commercial.
Given the dictionary definitions above, we could put a case forward for both classifications. The properties are definitely relating to residence so must be residential, but they are also able to yield a profit and bought for this purpose, which is a commercial use!
To avoid confusion, let us say that these are residential properties bought for a commercial purpose and consider whether when speaking of the property it is in the view of the tenant or the landlord, for they have very different needs for that property.
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