Confidence across the UK real estate sector has softened amid geopolitical tensions and wider economic uncertainty, but most industry professionals remain broadly positive about market conditions, according to new research published today.
The latest UKREiiF Insights Report, based on a survey of 9,626 delegates attending UKREiiF, which opens in Leeds tomorrow, found that 63.1% of respondents still hold a positive outlook for the sector despite concerns linked to the Middle East conflict, global economic pressures and financial market volatility.
However, sentiment has weakened compared with last year. Positive sentiment has fallen from 69.5% in 2025, while the proportion of respondents expressing negative views increased from 6.5% to 9.5%. Neutral sentiment also rose, suggesting a more cautious tone across the market.
The report, produced using research by Holistic Insight, suggests the sector remains resilient overall, although businesses are becoming more measured in their expectations amid ongoing uncertainty around inflation, borrowing costs and investment conditions.
Development and funding organisations recorded the sharpest fall in confidence levels, with positivity dropping from 69.4% last year to 57.7% in 2026. Despite this, investment appetite remains relatively strong, with almost two-thirds of respondents expecting to increase development or investment activity over the next 12 months.
Nathan Spencer, Managing Director of UKREiiF, said: “Positivity has reduced, perhaps unsurprisingly given the current climate, but the market remains committed. From the research and in-depth interviews conducted by Holistic Insight, there appears to be more caution, discipline and rigour in selecting opportunities, alongside an ambition and determination to deliver.
“The fact that our attendance numbers have also increased by circa 1,000 year on year shows a drive to support momentum too. In a year shaped by geopolitical uncertainty and viability pressures, this level of resilience really stands out.”
This commitment sits alongside an industry worried about feasibility, risk and delivery. Some 15.4% of all respondents cite viability and development economics as the number one factor shaping investment plans followed by geopolitical uncertainty, and cost of and access to finance. Then follows UK private investment growth, Government housing targets and international investment.
For the public sector, they see most value in engagement from the private sector in terms of attracting investment (25.6%) and delivering large-scale projects (24.6%), following by financial viability, project feasibility, pipeline certainty and risk allocation and management. Net zero does not feature highly in 2026, coming 7th in the list of priorities.
Among other industry groups, a surprise result perhaps is that construction and supply chain businesses are the most optimistic, with 73.8% reporting positive sentiment, up from 67% in 2025. This is despite 55% of this group also saying they do not expect construction costs to improve over the next 12 months, with lead-in times, margins, materials access and supply chain health all still under pressure.
Agents and asset managers show 69.5% positive sentiment. They provided their predictions on rental, asset and capital values. There is most optimism around rental values, with 52.4% expecting growth over the next 12 months and just 8.8% expecting decline. By contrast, asset values are expected to remain stable, with 51.2% of respondents taking a neutral view. In terms of sales values, 29.5% are expecting growth, 23.8% expecting values to fall, with 46.6% neutral.
Nicola Hanser, director of Holistic Insight, added: “Overall, the market appears to be resilient in the face of adversity. While confidence has reduced and conditions are more demanding, the intent to act remains stronger than sentiment alone might suggest. The insights show an industry holding firm despite uncertainty.”
The report also examined sector opportunity. The top 5 are as follows:
- Residential, including build-to-rent: 19.3%
- Regeneration: 13.4%
- Public sector activity: 11.2%
- Industrial and logistics: 9.3%
- Mixed-use development: 9.2%
Regionally, sentiment remains largely positive and balanced across the UK, with some areas showing more confidence than others:
- Positive sentiment overall ranges from 60.0% in the South West to 69.8% in Wales
- The North West, Northern Ireland and Scotland are among the most positive regions
- London, the South East and Yorkshire sit towards the lower end of the range
- Year on year, the sharpest decline in positive sentiment has been recorded in the South West, followed by the South East, Yorkshire and London
Download the report, here.
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