Predictions for the 2026 UK Real Estate Market

This week marked our first breakfast roundtable of 2026, bringing together industry contacts to discuss predictions and forecasts for the UK real estate market in the year ahead.

As expected, the conversation reflected a market that remains selective and nuanced, shaped by global events, planning challenges and shifting occupier demand. Below are some of the key themes that emerged.

Investor caution – but not across the board

While some investors remain cautious, this is far from universal. International capital, particularly from the Middle East and Japan, continues to target high-quality assets, with a willingness to pay a premium for well-specified buildings offering strong facilities and long-term resilience.

The UK remains an attractive destination due to the security and transparency of its real estate processes, including surveys, EPC requirements and dilapidations procedures.

That said, investors focused on cost efficiency are feeling more pressure. Rising fees and increasingly complex planning requirements are creating hesitation, particularly where large-scale or high-rise schemes face long delays or uncertainty.

Institutional investment themes

Several sectors generated strong discussion:

• Data centres continue to attract interest, although high energy demands and ESG requirements were seen as a significant cost consideration.
• Offices are being approached more opportunistically, with renewed demand in well-located assets as businesses encourage greater in-office attendance.
• Secondary retail and shopping centres in strong locations were viewed as potential opportunities, particularly where refurbishment can bring assets in line with current occupier expectations.
• Residential block leases were discussed in the context of increased housing supply, with limited short-term growth in housing costs expected.

Financing, management and long-term thinking

Long-term asset management emerged as a recurring theme. Proactive maintenance and planning were seen as key to preserving value, reducing long-term costs and avoiding expensive disposal processes driven by surveys, fees and taxation.

While interest rates are beginning to soften, capital remains selective, with investors focusing on assets that demonstrate durability, efficiency and clear long-term strategies.

Retail, hospitality and business rates

Rising business rates and operational costs were highlighted as ongoing challenges, particularly across hospitality, retail and leisure. Similar pressures are expected to affect smaller logistics and warehouse operators as employment costs and taxation increase.

Jason Antill’s Thoughts

If you’re thinking about your 2026 plans and would like to continue the conversation, feel free to get in touch with our team here.