July 31, 2025

In Search of Better Yields

The last two years have been typified by volatility in the mainstream market. Mortgage rates have climbed steeply and, when coupled with rising running costs and regulatory changes, it’s easy to see why buy-to-let investors are feeling perturbed.

Traditional BTL Deals No Longer Stack Up for Clients

For many, the strategy of buying single tenancy properties, using high LTV buy-to-let loans, is simply no longer viable. With average yields in some parts of the UK having dropped below 5%, not only will some deals no longer be viable from an income perspective, some investors will be grappling with affordability problems to attain workable leverage from their term lenders.

Help Clients Shift Toward Higher-Yielding Asset Classes

For many, the result has been a shift in appetite. We are seeing investors targeting higher-yielding asset classes at volume, with HMOs and semi-commercial properties being two of the most common. According to some sources, the average yield of an HMO in the UK stands at over 10% and of a semi-commercial property at over 7%. Both offer higher income potential, but also a degree of protection from rental voids given the fact that multiple tenants contribute to the rent. The latter also gives the added advantage of a FRI (fully repairing and insuring lease), which could result in lower maintenance costs.

Supporting Complex Cases with Octane Capital’s Refurbishment Product

Octane’s refurbishment product is regularly used by investors purchasing and converting properties into HMOs or semi-commercial properties. Whether it is a house being converted into an HMO or the upper floors of a commercial building being converted into flats, the scope of these works often fall under permitted development. The broad scope of permitted development means that investors can often avoid the need for a planning application, which creates fewer barriers to entry and makes these projects more attainable for borrowers with less experience.

About Octane Capital

Octane Capital is a specialist lender that provides short-term financing to property investors and are a leading provider of developer exit finance. We lend up to 75% LTV with rates from 0.73% per month (BBR linked).

Specialising in refurbishment finance, Octane Capital helps investors enhance property value by offering bridging loans, refurbishment loans, and developer exit loans.

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About Fiducia Commercial Network

Fiducia Commercial Network is a commercial finance ‘Appointed Representative’ network created to allow independent firms to provide commercial property finance and trading business finance options to their existing client base and network.

Joining the network provides opportunities for professional brokers to offer a full range of commercial finance solutions by acting as an Appointed Representative (AR) with the full support of the Fiducia Commercial Network team.

The Fiducia Commercial Network membership includes FCA authorisation and reporting, PI insurance, and NACFB membership, plus business, compliance, finance, system, and admin support from a company with over 20 years’ experience in commercial finance.

If you’d like to discuss joining Fiducia Commercial Network or you’d like to apply to become an Appointed Representative…

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To discuss Fiducia Commercial Network or to apply to become an Appointed Representative email the team via by clicking this link.

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