Property investors are switching from residential to commercial, which is a response to the government attempting to rebalance the power between landlords and tenants.
That is according to a report from German lender Handelsbanken, which found that 46% of investors expect growing demand for commercial assets, compared to just 17% for residential.
The Renters’ Rights Bill and upcoming Energy Performance Certificate rules are being blamed on this shift.
New EPC rules will mean all rental properties must be brought up to a C rating by 2030.
The bill includes the elimination ban of ‘no-fault’ Section 21 evictions, meaning landlords would have to use the slow-moving court system to evict a tenant.
The bill will also replace fixed term tenancies with the periodic model, where tenancies automatically renew.
Investors aren’t all negative in terms of the bill however, as 36% feel more positive, 48% neutral, and 12% more negative.
Chris Teasdale, spokesperson for Handelsbanken, said: “The results of this year’s report show an industry that still has plenty of optimism and potential, even in the face of uncertainty, challenge, and change.
“Whatever the wider economic backdrop, the good news is that this is still a sector with plenty of appetite for growth.”