A new study claims the private rental sector (PRS) is becoming more “operationally disciplined” thanks to regulation like the Renters Rights Act.
Handelsbanken’s fifth annual Property Investor Report says professional landlords are increasingly behaving like larger businesses, with clearer operating models, tenant strategies and investment plans, rather than casual investors responding opportunistically to the market.
In response to the Renters Rights Act, 59% of respondents to the bank’s study say they are tightening tenant selection criteria, while 56% say they are investing more in property condition or amenities. A further 44% are considering raising rents earlier than planned.
This suggests that regulation is changing landlord behaviour in fundamental ways, but not necessarily driving a wholesale retreat from the market.
Some 26% say they are considering selling some or all properties, while just 3% say they are shifting focus to a different sector.
A spokesperson for Handelsbanken comments: “Our report highlights that the majority of investors are looking to grow their portfolios despite the economic challenges that persist, and we are seeing that translate to increased activity in our region and optimism for future prospects.
“With key metrics continuing to hold up, particularly capital values and rental growth, Handelsbanken continues to support growth aspirations with flexible funding solutions.”
The report points to a UK property investment market that remains active, but is becoming more complex and more selective.
Professional landlords are still looking to grow, but the conditions for successful investment are changing. Rather than expanding indiscriminately, investors are placing greater emphasis on valuation discipline, tenant quality, asset standards, cost management and long-term resilience.
The bank claims this is likely to accelerate the professionalisation of the PRS.
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. In turn, this could change the shape of the market, with more professionally managed portfolios playing a greater role in rental supply.
For investors, the findings underline the importance of experienced advice, local market knowledge and long-term relationships in a more demanding environment.
Property investors continue to see reasons for confidence, but success is likely to depend on understanding where opportunities remain, managing risk carefully and being able to move decisively when the right assets become available.
