SME landlords plan to expand portfolios in response to growing demand

Handelsbanken research shows half of landlords plan to buy over the year ahead as confidence in residential and commercial property demand grows

SME landlords (1) are planning to expand their portfolios in the year ahead as optimism about residential and commercial property builds despite fears of an economic downturn and the cost of living crisis, new research* from property business experts Handelsbanken shows.

Its nationwide study shows half (49%) of professional landlords – those owning at least four properties – intend to buy more, of which 8% plan to invest in improving the quality of their portfolio, underlining their enduring confidence in bricks and mortar as long-term investment. 

Just 7% of landlords expect to sell some or all their portfolio, and a third (35%) are committed to retaining their current properties for the next 12 months.

The first Handelsbanken SME Landlord Survey found 86% of landlords expect a rise in demand for residential property, with nearly two-thirds (63%) confident that commercial property demand will also increase in the next 12 months.

Landlords’ optimism is not being driven by expectations of substantial increases in yields – Handelsbanken’s research shows average yields are only expected to rise by 0.44% over the period, although 89% of landlords questioned do expect an increase.

Instead, their plans to buy more properties are motivated by a desire to diversify their assets across different sectors and regions. 

Nearly three-quarters (73%) said their plans to buy are focused on expanding into different parts of the property market – the most attractive are houses (66%), followed by flats (38%), houses of multiple occupation (HMO) (34%) and commercial retail (32%). 

Among landlords expanding their portfolios to different parts of the UK, London is seen as the most attractive region (selected by 53%), followed by the East of England (chosen by 40%) and the East Midlands (22%).

More than half (51%) of landlords on the acquisition trail said their reason for buying was simply feeling bullish about the market.

James Sproule, UK Chief Economist, at Handelsbanken said: “Recent house price growth shows how property has shown its resilience against economic doom and gloom and the cost-of-living squeeze.  

“Landlords are anticipating that a shortage of rental properties will help keep prices buoyant, particularly as working patterns continue to adjust to the post pandemic world and people seek to move back to big cities, particularly in popular areas such as London, which is also seen to be better placed to ride out the next series of economic challenges and opportunities. 

“Landlords went through a tough period following the COVID-19 pandemic, with residential property transactions falling by more than half and business investment contracting. But the sector has survived and is now looking forward. 

“The 2022-23 financial year is forecast to see a further softening in residential property transactions as vendors wait for the right buyer rather than accept any perception of loss in value.”

The table below shows how professional landlords rate the attractiveness of regions across the country.

Landlords were asked which regions do they think will be attractive investments for them in the next 12 months. Respondents selected multiple answers.

Region Percentage of landlords who see the following regions as good investments over the next 12 months
London 53%
East of England 40%
East Midlands 22%
Scotland 19%
Northern Ireland 18%
North West 14%
South East 12%
Wales 12%
South West 10%
West Midlands 8%
North East 6%
Yorkshire & The Humber 6%
To read the Handelsbanken SME Landlord Survey Report 2022 click on the link below:

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For more information please contact: 

Patrick Evans /Camilla Wyatt
Citigate Dewe Rogerson

Notes to Editors

  • Research conducted by PureProfile in June 2022 among 120 UK professional landlords with a minimum of four properties in their portfolio. On average respondents own 7.5 properties with an estimated total market value of £2.76 million. All landlords questioned have exposure to residential property and 58% have exposure to commercial property
1   Professional landlords with a minimum of four properties in their portfolios. This applies to all references to “landlords” within this release.

Information on Handelsbanken plc

Handelsbanken is the trading name of Handelsbanken plc, which is incorporated in England and Wales with company number 11305395. Registered office: 3 Thomas More Square, London, E1W 1WY, UK. Handelsbanken plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 806852.

Handelsbanken plc is a wholly-owned subsidiary of Svenska Handelsbanken AB (publ).

Handelsbanken was established in Stockholm in 1871 and in Sweden, it is one of the country’s leading banks with a nationwide branch network. The Bank’s home markets are Sweden, Norway, the Netherlands, and the UK. It also has operations in Luxembourg and the USA.

In the UK, Handelsbanken is a relationship bank with a decentralised way of working, a strong local presence due to a nationwide network of branches, and a long-term approach to customer relations. Handelsbanken specialises in providing personalised and competitive banking services to both businesses, individuals, and property investors, and offers wealth and investment management services through its UK subsidiary Handelsbanken Wealth & Asset Management. Each Handelsbanken branch operates as a small business enabling it to make decisions at a local level and provide a bespoke service. The focus is always on the need of the individual customer and not on the sale of specific products.

For information regarding sustainability at Handelsbanken, please see here: