According to a recent nationwide survey conducted among prominent UK investors, who on average possess 29 properties valued at approximately £14 million each, it was discovered that 59% of them have intentions to expand their portfolios in the upcoming year. This figure emphasises their unwavering confidence in the long-term value of UK property as an asset class. Conversely, only 14% of these investors anticipate selling some or all of their properties.
In the Handelsbanken Professional Landlords Survey, it was revealed that over half (57%) of those seeking to acquire additional properties also have plans to diversify into new sectors. Notably, offices (43%) garnered the most interest among investors, who aim to capitalise on the currently low valuations prevailing in the market.
An overwhelming majority of the respondents (92%) expressed their belief that the value of their portfolio will experience growth over the course of the next 12 months. In fact, 39% of them predict an increase of over 20%. Conversely, only 8% of the participants expect their portfolio value to remain relatively stable.
James Sproule, the UK Chief Economist at Handelsbanken, provided his insights on the survey results:
“The bottoming out of commercial property prices in Q1 2023 corresponds with reasonably positive sentiment expressed towards the sector in this survey.
Commercial property values saw a major correction in the second half of 2022 as a direct impact of the higher interest rate environment. Average retail property prices were down by 15%, office prices were also down by 15%, and industrial unit prices were down by 25%.
In addition, there are the ongoing considerations around post-pandemic working practices and retailing habits which, until they are more settled, will be weighing on commercial property valuations.”
When it comes to geographical expansion, three-fifths of the surveyed investors who plan to expand their portfolios also intend to make purchases in new regions. London emerged as the most appealing region for property investment over the next 12 months, receiving recognition from 27% of investors. The South East followed closely behind with 26% of investors expressing interest. In contrast, Yorkshire and the Humber, as well as the West Midlands, attracted attention from a mere 9% of the sample, making them less favourable for property investment.
Danielle Coe, the branch manager in Leamington Spa, offered her perspective on the findings:
“As we can see from these results, there’s a regional variation in landlord sentiment. The findings highlight how important it is to know the area where you are planning to invest, especially as we can see landlords say they’re looking to diversify geographically.
Because our branches are located in the areas we serve, we have a deep knowledge of the local market and are able to offer property professionals informed advice to allow them to make decisions that work for them. Our customers are telling us that they find it a real benefit to have this expertise ‘on their doorstep’.”
For a comprehensive understanding of the survey findings, the 2023 Handelsbanken Professional Landlords Survey can be explored.
This report builds upon Handelsbanken’s inaugural property report conducted in 2022, which specifically focused on SME landlords possessing a minimum portfolio size of four properties. On average, the respondents of the previous report owned 7.5 properties with an estimated total market value of £2.76 million.
For more information on this topic, email William.oakes@attwells.com
