UK Property Turns the Corner as Capital Values Stabilise

Early-2026 conditions point to a tentative recovery phase for UK real estate, shaped by easing inflation, cautious rate cuts, and selective investor re-engagement, based on analysis by Schroders’ UK real estate team.

• Capital values resumed modest growth in 2025, led by industrial, residential, and retail assets, while offices remain under pressure amid sharp quality polarisation.

• Monetary easing and yield compression support forward returns, with 2026 total returns projected at 9–10%, well above long-run averages.

• Occupier demand is subdued but structurally supportive for high-quality, sustainable assets amid constrained future supply.

Where might this nascent recovery strengthen—or stall? The full commentary explores sector-level risks, return drivers, and portfolio positioning in depth.