June 16, 2025

Broker Trends and Opportunities – June 2025

Unlocking Yield: How Property Finance Brokers Can Help Clients Diversify

In today’s evolving property market, savvy investors are looking beyond traditional single-unit Buy-To-Lets to maximise returns.

For property finance brokers, this presents a significant opportunity, not just to fund individual transactions but to guide clients in building diversified, high-yielding portfolios that align with their long-term commercial goals.

Why Diversification Matters

Diversification in property investment is about spreading risk and increasing income potential by investing across different asset types, locations, and tenancy models. In 2025, with rental demand at record highs and regional markets outperforming traditional hotspots, diversification is more than a strategy – it’s a necessity.

Ways to Increase Yield Through Diversification

Brokers can support clients in exploring a range of options to boost portfolio performance:

  • Geographical Diversification
    Northern regions such as the North East and Yorkshire are delivering stronger returns than overheated southern markets. Average rental yields in these areas are reaching 7–8%, compared to 4–5% in parts of London and the South East *

  • Multi-Unit Properties
    Investing in HMOs (Houses in Multiple Occupation) or blocks of flats (MUBs – Multi Unit Blocks) can significantly increase yield. HMOs, for example, can generate 8–12% gross yields, depending on location and tenant type *

  • Semi-Commercial and Commercial Properties
    Adding commercial or mixed-use properties to a residential portfolio can offer longer lease terms and higher returns. Commercial properties often yield 7–10%, with the added benefit of tenants typically covering maintenance and insurance costs under FRI leases **

  • Holiday Lets and Short-Term Rentals
    In tourist-heavy areas, holiday lets can outperform standard ASTs (Assured Shorthold Tenancies). According to 2025 data, holiday lets in coastal and rural hotspots are achieving 10–14% gross yields, though they come with higher management involvement and seasonality *

  • Social Housing Investments
    Often overlooked, social housing offers 8–10% net yields, backed by government funding. These investments provide stable, long-term income with minimal management requirements *

  • Commercial Leases vs. Residential ASTs
    While ASTs offer flexibility, commercial leases provide stability. Lease terms of 5–25 years are common in commercial property, reducing void risk and ensuring predictable income streams **
The Broker’s Role in Strategic Portfolio Planning

Traditionally, brokers have focused on financing individual property purchases. But in 2025, those who take a broader view – understanding their clients’ full investment strategy and commercial goals – are better positioned to add value. By advising on diversification and structuring finance accordingly, brokers can help clients:

  • Improve cash flow and reduce risk
  • Access specialist finance products for mixed-use or commercial assets
  • Unlock equity in existing assets to fund new acquisitions
Real-World Impact

Consider a client with a £1 million portfolio of single-unit residential lets yielding 5%. By reallocating 30% into HMOs, 30% into semi-commercial properties, and 20% into holiday lets, while retaining 20% in standard Assured Shorthold Tenancies (ASTs), they could potentially increase their blended yield from 5% to over 8%, significantly improving annual income and long-term capital growth.

Conclusion: Brokers win as Strategic Partners

The UK property market in 2025 is rich with opportunity—but only for those who adapt. Brokers who understand their clients’ overall commercial objectives, rather than focusing solely on the next transaction, can become indispensable strategic partners. By helping clients diversify intelligently, they not only enhance portfolio performance but also future-proof their own businesses.

In a market where yield is king and flexibility is key, the brokers who think bigger today will be the ones who win tomorrow.

Mark Grant
Managing Director, Fiducia Commercial Network & Fiducia Commercial Finance
June 2025

*Source: https://yieldinvesting.co.uk/investing-in-uk-property-in-2025/
**Source: https://assetsforlife.co.uk/commercial-vs-residential-property-investment-in-uk

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