2026 won’t be without it challenges but we expect investors and lenders to target real estate assets where fundamentals are strong.
Hi, I’m Ian Guthrie the newly appointed Head of Real Estate Advisory at Grant Thornton.
What did we learn from 2025?
As we look back at UK real estate investment activity in 2025, the headline figures tell an important story.
Total transaction volumes reached circa £50 billion, materially ahead of the previous year, and broadly in line with the 10 year average. Over a third of that activity completed in the final quarter, signalling renewed confidence and a stronger finish to the year.
The Living sector accounted for more than a third of all activity, continuing its position as the most resilient segment of the market. Meanwhile, although Office investment remained below its 10 year average, we saw growing investor and occupier appetite for best in class, sustainable assets.
Another notable trend was the continued strength of overseas capital, with North American investors particularly active and continuing to play a major role in supporting activity.
What about 2026?
In 2026 the messaging to our clients is clear: while there will be challenges, momentum is building where fundamentals are strong. We expect selectivity to define the year ahead, with capital continuing to prioritise income resilience, operational real estate, and high-quality assets with robust ESG credentials. We also expect the Living sector to once again top the charts.
Where are we spending our time?
We have had a busy start to the year. Our team has been particularly active across the Living sectors – especially residential development. We’ve spent significant time supporting regional housebuilders as they navigate the impact of slowing sales rates, and helping others identify funding strategies to support growth in activity driven by land bank investment.
Grant Thornton
At Grant Thornton, we cover all real estate asset classes – from Living to Offices, Retail, Industrial and Alternatives. Our clients include real estate investors, developers, operators and lenders, and we provide a senior-led full suite of advisory services tailored to our clients’ needs.
By combining deep financial expertise with a comprehensive understanding of the real estate market, we deliver tailored advice and solutions that help our clients navigate challenges, seize opportunities, and drive growth in a dynamic industry.
If you’d like to discuss real estate sector trends or your investment, development or funding strategies then please do reach out to myself or my colleagues.
