Property investors are cautiously optimistic and focusing on the prospect of base rate cuts ahead of UK and global political issues, according to a new study.  

Handelsbanken’s latest ‘Property Investor Report’, based on insights from UK property investors with an average of 35 properties each, found more than half (52%) say the prospect of a rate cut in August and potentially a further cut before the end of the year makes them more optimistic about the market.

That is partly reflected in the easing of signs of tenant stress – around 53% of those questioned reported issues of rental deferral/contract negotiations, compared with 60% in the previous Handelsbanken report in 2023. The number experiencing overdue or late payments fell to 34% this year compared with 41% in the previous year.

Despite the drop in reported tenant stress, void periods have increased. 60% of the panel reported an increase in voids, up from 54% in the previous year although Handelsbanken believes this may be partly driven by tenant demand for quality and EPC ratings.

Polled ahead of the general election, the panel reflected wider market sentiment on the impact of a change in government, with the majority (51%) saying it would not affect plans for their business. Around two-fifths (40%) said geopolitical uncertainty made them more positive about the UK property market while 44% said it had no impact.