Research shows 鈥榣iving sector鈥�, including student accommodation and retirement homes, attracted 30% share of real estate market
The residential market attracted the largest proportion of real estate investment for the third quarter running, according to new research, which also shows signs of recovery across the wider property market between April and June.
Research for the first half of this year, released today by property consultancy JLL, shows that the headline volume of UK real estate investment was 拢16.2bn over this period. This was in line with the figure for the first half of 2023 but 25% below the H1 average of 拢21.5bn.
And including mergers and acquisitions together with land and development investment, the overall volume increased 12% year-on-year to 拢22.6bn, JLL said.
This overall measure of UK real investment also saw an increase from 拢10.9bn in the first quarter of this year to 拢11.7bn in the second three-month period.
JLL鈥檚 figures also show that the living sector, covering all segments of the residential market including student accommodation and retirement homes, attracted the largest proportion of investment for the third quarter running.
JLL鈥檚 research showed the living sector attracted 拢4.8bn in investment, accounting for a 30% share of the real estate market. This compares to the living sector accounting for a 20% average share of real estate investment over the last ten years.
The 拢3.5bn of real estate investment attracted by central London far outstripped any other UK region although this amounted to a 46% fall on its ten-year average.
Greater London (拢2.8bn), the south east (拢2bn), the north west (拢970m) and Scotland (拢770m) made up the rest of the top five for investment volumes, though all saw dips on their respective ten year averages.
International investors accounted for 52% of total real estate investment with the Americas making up the most active regional group of buyers at 26%.
>>See also: Construction output down in Q2 despite second consecutive month of growth
Andrew Frost, head of capital markets at JLL, said: 鈥淚t鈥檚 been a tale of mixed fortunes for the UK鈥檚 real estate sector so far this year. A mild recession at the tail end of 2023, combined with a turbulent political environment, has meant many investors have taken a 鈥榳ait and see鈥� approach to deploying capital.
鈥淏ut the sector is resilient, as it has shown time and time again. Stability in policy, proposed changes to the planning system to make building less burdensome and optimism that interest rates will continue to fall means many will be eyeing the second half of the year as an opportune time to invest. Those factors will, in turn, be crucial to driving the economic growth the new government is aiming for.鈥�
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