The Government’s attempts to ‘rebalance’ the power between landlords and tenants has led to an ‘historic’ shift in investor focus from residential to commercial, a new report has claimed.
German lender Handelsbanken has published its annual review of the property investment market which reports that, while half of investors are looking to increase the size of their portfolio, increasingly this means purchasing commercial not residential property.
46% of respondents it quizzed said they expect significant growth in demand for commercial assets, compared to just 17% for residential, marking a “historic shift in investor preference”.
The report also examines legislative impacts, such as the Renters’ Rights Bill and EPC reforms.
While a third of respondents view EPC changes positively and half see no effect, the Renters’ Rights Bill elicits a mixed response – 36% feel more positive, 48% neutral, and 12% more negative.
Uncertainty
Spokesperson Chris Teasdale (pictured) says: “The results of this year’s report show an industry that still has plenty of optimism and potential, even in the face of uncertainty, challenge, and change. Whatever the wider economic backdrop, the good news is that this is still a sector with plenty of appetite for growth”.
But despite Handelsbanken’s desire to talk up the market, its own data reveals that 7% plan to reduce the size of their portfolio while 15% want to sell up all their properties.
The report also reveals some unusually detailed information on the make-up of the UK landlord/investor sector.
Properties
Approximately one-fifth of respondents had between 5-15 investment properties, 18% owned between 15-25 properties; 18% owned between 25-50 properties and 47% owned more than 50 properties.
Also, half had a total portfolio worth up to £5 million, 47% had portfolios valued between £5 million to £10 million, and 2% had portfolios more than £10 million.
The most common sectors represented within these portfolios (in descending order of size) included Purpose-Built Student Accommodation; HMO student lettings; offices; industrial properties; non-student lettings HMOs; retail properties; leisure and hospitality assets; healthcare properties and static park homes.]
