Appetite is ‘significant’ across the residential market, says report
Nearly three-quarters (71%) of professional property investors plan to invest in Build to Rent developments, despite a sharp fall in the number of new BTR homes starting construction, according to Handelsbanken’s fifth annual Property Investor Report.
Its survey of 200 real estate investors, property management professionals and landlords showed that investment appetite was strong across the residential rental market, with nearly two-thirds (63%) planning to increase their exposure to houses over the next 12 months, 59% increasing their exposure to flats and almost half (48%) to HMOs.
Of those planning to expand their portfolios, 58% cite strong rental demand as an influencing factor.
A broader range of rental housing
James Sproule, UK chief economist at Handelsbanken, said: “Professional investors are looking across a much broader range of rental housing than the traditional buy-to-let model alone.
“Build to Rent is particularly striking in our findings, but there is also significant appetite for houses, flats and HMOs. That suggests investors are thinking carefully about where rental demand is coming from and which types of property are best placed to meet it.
“Strong rental demand remains an important part of the investment case. For professional investors, the question is increasingly not simply whether they want exposure to residential property, but which type of rental housing offers the right opportunity in a particular market.
“That is likely to mean greater variety in how investors build their portfolios, with traditional rental property sitting alongside newer and more specialised forms of housing.”
Sproule said investors are clearly looking to what works where. “There is no single rental market. Demand can look very different depending on location, property type and the needs of tenants, and professional investors recognise that.
“The breadth of investment intentions in our research suggests investors are looking to build portfolios that can respond to those differences. Build to Rent is an important part of that story, but it sits alongside continued demand for more traditional residential property.”
