New research has shown that 94% percent of landlords are experiencing problems with their tenants in the current economic climate.
Research conducted by Handelsbanken found that most (60%) landlords are receiving requests for rental deferments or contract negotiations, over half (54%) are seeing increased voids compared to previous years, and many (41%) are experiencing overdue or late payments.
Only 6% said they were not experiencing any stresses of these kinds.
The data was gathered from 200 professional landlords across the UK, with respondents having an average portfolio size of 29 properties with a market value of £14m.
However, despite the economic uncertainty, landlords remain confident about the market, with the majority (59%) planning to acquire at least one new asset in the coming year.
Nearly half (49%) of those surveyed expect demand for commercial property to increase significantly over the next 12 months.
Of those surveyed, 39% expect the value of their portfolio to increase significantly over the next year, however 45% said they were “bullish” about the market.
Three fifths of respondents said they would be looking to diversify geographically, with London (27%) still the most attractive spot for investors. This was followed closely by the South East (26%) and the East (24%) of England.
Yorkshire and the Humber (8.5%), the West Midlands (9%), and Wales (10.5%) were seen as the least attractive.
Retail and leisure landlords may be concerned by the survey’s findings that commercial offices (43%) and residential flats (41%) were seen as the most attractive sectors. The former could be surprising to some considering working patterns post-Pandemic.
“This study highlights that professional property investors remain bullish about the sector’s prospects in the long term. However, risks and challenges remain firmly in place, and the need for effective portfolio and capital management has taken centre stage”, Handelsbanken said.
“Despite the myriad challenges feeding into a difficult economic backdrop, large portfolio investors are on the whole skilfully navigating the current market conditions”, the bank added.