Overseas investment into UK property has slowed sharply, a survey suggests.
Real Estate:UK and CoStar’s latest report shows global uncertainty, a weaker US dollar and concerns around development viability weighing on investor confidence.
UK commercial property investment reached £9.7 billion in Q1 2026, almost 40% below the five-year first-quarter average.
Overseas capital accounted for £3.6 billion of investment in Q1, with inflows from the US easing significantly following a record year in 2025.
The slowdown suggests that the weaker dollar may already be affecting the relative attractiveness of UK assets for overseas buyers, with higher financing costs and wider global uncertainty also contributing to a more cautious investment environment.
As in previous years, the US remained by far the largest overseas investor into UK property.
American investors deployed £18.2 billion during 2025.
European capital also became more active during 2025 with French investors deploying more than £1 billion into UK real estate, while Norwegian, Swedish and Japanese investors remained active.
Melanie Leech, Interim Chief Executive, Real Estate:UK, says: “The UK continues to attract substantial international capital into real estate, reflecting the sector’s long-term strengths and the country’s reputation as a stable and transparent place to invest.
“However, the significantly weaker start to 2026 highlights how sensitive international capital flows are to changes in the wider economic and geopolitical environment.
“Sterling’s appreciation against the dollar may also be eroding some of the pricing advantage that helped drive exceptionally strong US investment into UK real estate during 2025.
“At the same time, investors continue to raise concerns about the challenges of deploying capital into new development and upgrading existing assets in the UK.
“Elevated construction costs, regulatory delays and policy uncertainty are all affecting development viability and investor confidence at a time when attracting long-term capital into housing, infrastructure and commercial real estate is critical to supporting economic growth.”
