Professional property investors remain confident about the future of the private rented sector despite mounting regulatory and economic pressures, according to Handelsbanken’s latest Property Investor Report.
The report, based on a survey of 200 UK property investors, landlords and property management professionals conducted after the outbreak of the Iran conflict, suggests that while the sector is becoming more selective and operationally demanding, large-scale landlords are continuing to expand rather than exit.
According to the findings, 93% of respondents expect their portfolio values to rise over the next 12 months, while 84% plan to increase their holdings – significantly higher than the 54% recorded in Handelsbanken’s 2025 survey.
Only 1% said they intend to leave the market entirely within the next year.
PROFESSIONALISED SECTOR
The report suggests the private rented sector is becoming increasingly professionalised, with landlords placing greater emphasis on operational scale, tenant quality and long-term investment discipline as they adapt to the Renters’ Rights Act, rising costs and ongoing geopolitical uncertainty.
Among those planning to grow their portfolios, 70% cited buying opportunities and valuations as a key driver, while 58% pointed to strong rental demand.
At the same time, regulation is already influencing landlord behaviour.
Some 59% of respondents said they are tightening tenant selection criteria in response to the Renters’ Rights Act, while 56% are investing more heavily in property condition and amenities.
A further 44% said they are considering raising rents earlier than planned.
Only 26% said they were considering selling some or all of their portfolio, while just 3% said they were looking to move into another sector entirely.
CHALLENGING ENVIRONMENT
James Sproule (main picture, inset), UK Chief Economist at Handelsbanken, says: “Our survey suggests there has not been a notable exodus of professional investors from the UK property market.
“Instead, landlords are adapting to a more challenging environment by becoming more selective, more operationally disciplined and more focused on scale.
“The Renters’ Rights Act, higher costs and geopolitical volatility are all making property investment more complex.
“That does not mean professional investors are walking away, but it does mean the sector is likely to look different, with larger and more strategic landlords better placed to absorb cost, manage risk and take advantage of opportunities.”
