Housing Sector Leads Real Estate Investment in Q3: JLL Report

London, 16 August 2024: As the property market in the UK shows signs of recovery, a recent report by the property consultancy firm JLL outlined that the residential property market commonly known as the ‘living sector’ has attracted the largest proportion of real estate investment in the UK for the third consecutive quarter. A new sense of optimism has hit the market owing to expectations of political and economic stability following a regime change in the country. The comprehensive JLL report paints a very promising picture for the market to recover after a steep decline from its peak in 2022.

As per the report, a whopping 4.8 Bn GBP was invested in the residential market - a 30% market share of the broader real estate market -  which includes student accommodation and retirement homes during the third quarter of the year. This represents a significant increase from the residential market’s 20% average market share of the past decade.

The UK real estate investment market has remained steady in the first of this year, with investments totalling to 16.2 Bn. GBP, as was the case last year too. However, this figure is still 25% below the ten-year average of 21.5 Bn. GBP. M&A and land & development investments, showed a 12% YoY increase for a total investment of 22.6 Bn. GBP. 

The report shows that Central London led the regional investment trends attracting a total investment of 3.5 Bn. GBP, although it is a 46% decline from its ten-year average. Greater London, the South East, the North West, and Scotland followed, though all regions experienced drops compared to their respective ten-year averages.

International investment accounted for more than 50% of the total amount invested. American investors remained the most active of international investors contributing 26% of the total investment. 

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.”