Investment in UK real estate reached £16.2bn in H1 2024 – 25% below the 10-year average of £21.5bn, but in line with H1 2023 activity, according to the latest research from JLL.
Although headline volumes remained slightly subdued throughout H1, overall volumes – including M&A, land and development investment – increased 12% year-on-year to £22.6bn.
International investors accounted for 52% of total activity in H1 and the living sector attracted the largest proportion of investment for the third quarter running. JLL’s research showed the living sector attracted investment of £4.8bn – a 30% share of the market.
London remains the biggest draw for both domestic and international investment, although the £3.5bn the capital attracted in H1 was a 46% fall on the 10-year average.
Greater London (£2.8bn), the South East (£2bn), the North West (£970m) and Scotland (£770m) made up the rest of the top five for investment volumes, though all saw dips on their respective 10-year averages.
Andrew Frost, head of capital markets at JLL, said: “It’s been a tale of mixed fortunes for the UK’s 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 ‘wait and see’ approach to deploying capital.
“But 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.”
