The UK commercial property capital markets will enter a phase of stabilisation and gradual recovery through 2026, rather than a sharp rebound in activity, following an extended period of repricing, according to new research published by Carter Jonas.
The firm said sentiment had already begun to improve, supported by greater clarity on interest rates, more realistic pricing expectations and a growing willingness to transact.
It added performance in 2026 will increasingly be shaped by a desire for stable income and a ‘flight to quality’ rather than capital appreciation, with investor attention shifting towards asset quality, income durability, capital expenditure requirements, and long-term relevance.
Ali Rana, head of national investment at Carter Jonas, said: “Recovery will take time and will not be uniform, but stabilising yields, income-led returns, and gradually returning capital are laying the foundations for a more functional and liquid market. Confidence is starting to return to the market as it adapts to a new pricing reality, with a clearer sense of where value sits. When value becomes easier to evidence, fewer deals fall away and capital starts to move with greater oversight and conviction. These factors are creating a healthier base for 2026, with income and asset quality back at the centre of investment decision making.”
