UK Property Investment Falls to Two-Year Low in Q2 2025

UK property investment volumes fell to a two-year low in Q2 2025, totaling £8.8 billion, a 6% decline from Q1 and 27% below the five-year quarterly average. This drop was primarily due to the absence of large-scale deals, with no transactions exceeding £400 million for the first time in five years; the largest deal was a £390 million joint venture for a student accommodation project in Manchester. Despite the overall decline, the number of deals was only 9% below the five-year average, indicating some transactional resilience. The living sector saw a 21% increase in investment quarter-on-quarter, driven by purpose-built student accommodation, hotels, and healthcare, though still 16% below its five-year average. The office sector showed signs of recovery with investment volumes moderately down from a recent high, while retail remained relatively resilient despite an 11% drop from Q1. International investment decreased to its lowest since Q3 2023, with North American inflows holding comparatively steady, but Far East and European investments remaining subdued.