Professional landlords are increasingly drawn to the allure of multi-unit freehold blocks (MUFBs), a trend that's gaining momentum as revealed by Shawbrook’s own data.

In fact, Shawbrook’s records show a notable 14% surge in landlords aiming to invest in MUFBs in 2024 compared to the previous year. But it’s not just the quantity of interest that's rising—the financial stakes are higher, too. There’s been a staggering 37% uptick in the value of mortgages landlords are seeking to back these investments, suggesting a deliberate shift towards acquiring more valuable properties while still maintaining prudent leverage ratios.

Scotland, in particular, has become a hotspot for MUFB investments. Here, the proportion of mortgages agreed in principle has more than doubled, leaping from 3.1% to 7.4%. Meanwhile, the North West isn’t far behind, with a 43% increase in mortgage agreements (rising from 5.3% to 7.5%).

This surge isn’t just a fluke. According to Shawbrook, it’s a clear indicator that landlords are keen on expanding their portfolios. The appeal? MUFBs offer not just diversified income streams but also the promise of higher yields than what a single unit can deliver.

Daryl Norkett, director of real estate proposition at Shawbrook, elaborated on this shift: “Multi-unit freehold blocks are another attractive option for professional landlords looking to diversify their portfolios.”

He went on to say, “MUFBs typically provide high rental yields, are in high demand, and tend to have a lower risk for void periods; all of which make them a popular choice for landlords.”

This trend towards higher-yielding properties is not confined to MUFBs alone. Norkett observed, “In fact, we’re seeing this trend towards higher-yielding property types across the board with landlords increasingly considering property types like houses in multiple occupation (HMOs) and semi-commercial properties, which are similarly seeing a rise in activity due to their ability to provide a higher rental yield and shield against any economic challenges.”

For those intrigued by the potential of MUFBs, Norkett offers a piece of advice: “Those interested in finding out more about MUFBs or how they can further diversify their portfolio should get in touch with a broker to better understand their options.”

In essence, the property investment landscape is evolving, with professional landlords gravitating towards options that promise both diversity and robust returns. The rise of MUFBs is just one piece of this broader shift, signalling a strategic response to the demands of the market and the economic uncertainties that come with it.