Professional landlords have been largely undeterred by regulatory changes, with 93% expecting their portfolio value to rise over the next 12 months.

Handelsbanken’s Property Investor Report reveals that 84% plan to increase their portfolio holdings compared with 54% in its last year’s survey. Only 1% are exiting the market entirely within the next year.

It says professional property investors are increasingly behaving like larger businesses, with clearer operating models, tenant strategies and investment plans, rather than casual investors responding opportunistically to the market.

The findings point to a more professionalised PRS, with landlords increasingly needing scale, operating expertise and clear investment strategies to adapt to regulation, rising costs, tenant affordability pressures and geopolitical uncertainty.

Adapting

James Sproule, UK chief economist at Handelsbanken, says rather than an exodus of professional investors, 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,” Sproule explains. “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.”

Response

In response to the Act, 59% of respondents say they are tightening tenant selection criteria, while 56% are investing more in property condition or amenities. A further 44% are considering raising rents earlier than planned.

Rather than expanding indiscriminately, investors are placing greater emphasis on valuation discipline, tenant quality, asset standards, cost management and long-term resilience.

This is likely to accelerate the professionalisation of the PRS, says Handelsbanken. As regulation increases, operating costs remain elevated and tenant expectations continue to evolve, landlords with scale, experience and clear operating strategies may be better placed to adapt.

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