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A new Handelsbanken survey of 200 professional investors shows Build to Rent leading the way, with 71% planning BTR investment and most also adding houses, flats and HMOs. We break down the four property types investors are buying, what is driving the shift, and where new-build flats fit for anyone diversifying beyond traditional buy-to-let.
Professional property investors are no longer thinking in terms of buy-to-let alone. A new survey of 200 of them shows the modern portfolio spreading across Build to Rent, houses, flats and HMOs at once, and rental demand is the reason.
Key Takeaways
- 71% Target Build to Rent: Nearly three-quarters of professional investors plan to invest in Build to Rent, the single strongest signal in the report.
- Diversification Is the Strategy: Houses (63%), flats (59%) and HMOs (48%) are all in play as investors widen the net beyond traditional buy-to-let.
- Rental Demand Drives It: 58% of those expanding their portfolios name strong rental demand as the reason, not a bet on quick price rises.
- New-Build Flats Fit: With 59% adding flats and BTR appetite high, well-located new-build apartments sit exactly where the demand is heading.
Jump to section:
The buy-to-let model is broadening
Watch: Why Investors Are Moving Into Build to Rent
How professional investors are diversifying beyond buy-to-let, in under a minute.
According to Handelsbanken's fifth annual Property Investor Report, a survey of 200 professional investors, landlords and property managers, 71% now plan to invest in Build to Rent developments. That does not mean buy-to-let is finished. It means the definition of a rental portfolio is widening.
For years, buy-to-let was the default route into UK property investment. That is changing. Faced with higher borrowing costs and a tighter regulatory backdrop, professional investors are spreading capital across more of the rental market rather than concentrating it in a single strategy.
Build to Rent is the clearest sign of that shift. Purpose-built, professionally managed rental blocks were once the preserve of large institutions. Now private investors want the same qualities for themselves: reliable tenants, hands-off management, and buildings designed for renting rather than adapted for it.
Quick FAQ:
Q: Does this mean buy-to-let is dead?
A: No. The report shows investors broadening, not exiting. Buy-to-let remains the core, but it now sits alongside Build to Rent, HMOs and a deliberate mix of houses and flats rather than standing on its own.
200 Pro investors surveyed | 4 Property types in demand | 71% Plan Build to Rent |
The 4 things pro investors are buying
The spread underneath the Build to Rent headline is the real story. Investors are not picking one horse. They are building blended portfolios, and four property types dominate their plans for the next 12 months.
Where investors plan to add exposure (next 12 months)
100%
75%
50%
25%
0
71%
63%
59%
48%
Build to Rent
Houses
Flats
HMOs
Share of professional investors planning to increase exposure. Source: Handelsbanken Property Investor Report.
Each of the four plays a different role, and the smartest portfolios use them in combination rather than betting on one. Build to Rent and flats lead on hands-off, liquid income, houses anchor long-term capital growth, and HMOs push yield hardest for investors who want it. Swipe through how each one earns its place:
01
Build to Rent
Purpose-built, professionally managed homes. Hands-off income, and where the market is heading.
02
Houses
The capital-growth play, with longer-staying family tenants. Higher entry price, lower yield.
03
Flats
City-centre yield and the fastest to let, with no refurbishment gap before tenants.
04
HMOs
The highest gross yields, for investors happy to manage the extra work.
Swipe or scroll for all four.
What is driving the shift
This is demand-led, not hype-led. 58% of investors expanding their portfolios cite strong rental demand as the influencing factor, a very different foundation from betting on quick price rises. As James Sproule, UK chief economist at Handelsbanken, put it, professional investors are "looking across a much broader range of rental housing than the traditional buy-to-let model alone."
63% Adding houses | 59% Adding flats | 58% Cite rental demand |
The table below sets the four types side by side, so you can see where each fits before committing capital.
| Property type | Investor appetite | Best for | Consider |
|---|---|---|---|
| Build to Rent | 71% | Hands-off, professionally managed income | Newer asset class, fewer private entry points |
| Houses | 63% | Capital growth and long-stay family tenants | Higher entry price, lower gross yield |
| Flats | 59% | City-centre yield and fast, easy letting | Service charges and ground rent |
| HMOs | 48% | The highest gross yields | Licensing and management intensity |
Quick FAQ:
Q: Why are investors so confident in rental demand?
A: Renter numbers keep outpacing new rental supply, so occupancy stays high and rents hold firm. That reliability is what makes a diversified rental portfolio attractive even while borrowing costs are elevated.
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Where new-build flats fit in
For an investor acting on this data, the practical question is what to actually buy. With 59% adding flats and Build to Rent demand this strong, well-finished new-build apartments in high-demand cities are close to the centre of the target. They let quickly, need no refurbishment gap, and suit the professionally-let model the report points to. The North West is where that logic is strongest: strong tenant demand, more affordable entry prices than the South, and yields that support the numbers.
Explore: Pall Mall Square, Liverpool
A landmark new-build development in the heart of Liverpool's commercial district, offering professionally-let apartments built for exactly the rental demand this report describes. A natural fit for investors moving into the Build to Rent model.
Quick FAQ:
Q: Are new-build flats a good entry point for smaller investors?
A: Often yes. They are lower-maintenance than houses or HMOs, let quickly in city centres, and give a hands-off route into the same rental demand the larger Build to Rent players are chasing.
How to position a portfolio
The takeaway is not to chase every property type at once. It is to treat rental demand as the anchor and build around it: pick locations where tenants are plentiful, favour stock that lets easily, and diversify deliberately rather than piling into a single asset type. The investors in this survey are doing exactly that, and the direction of travel is clear.
Related Reading
The bigger picture matters, three related pieces:
- First-Time Buy-to-Let: Your UK Investor Guide - where the traditional model still makes sense to start.
- Manchester: A Lucrative Opportunity for Buy-to-Let Investors - the North West case in one city.
- Homes for Sale Hit a 12-Year High and Buyers Have the Upper Hand - the buying conditions behind the shift.
Fresh UK property market updates for investors, regeneration, yields, tax rules and monthly rental data, all in one hub. Read the latest here.
Frequently Asked Questions
Everything investors are asking about Build to Rent, buy-to-let diversification and where the strongest rental demand sits right now.
Build to Rent (BTR) is purpose-built rental housing, designed and managed specifically for tenants rather than sold off unit by unit. It is professionally managed, often with on-site services, and has grown from an institutional niche into a mainstream investment class.
The Handelsbanken Property Investor Report found 71% of professional investors plan Build to Rent investment because it offers hands-off, professionally managed income backed by strong, reliable rental demand.
Yes, but it is no longer the only option. The same report shows investors keeping buy-to-let as the core while diversifying into Build to Rent, houses, flats and HMOs to spread risk and capture demand across the whole rental market.
Renter numbers continue to outpace new rental supply, which keeps occupancy high and rents firm. 58% of investors expanding their portfolios cite strong rental demand as their main reason for buying.
HMOs still deliver the highest gross yields, and 48% of investors plan to add them. The trade-off is heavier management and licensing, so they suit investors with the appetite for a more hands-on model.
The North West combines strong tenant demand, more affordable entry prices than the South, and yields that support the numbers, making it well suited to Build to Rent style, professionally-let new-build apartments.
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