A new study by Downing LLP reveals a growing commitment among institutional investors in the UK to increase their involvement in residential property development, aligning with national building targets.
The research surveyed institutional investors overseeing approximately £405.6 billion in assets, including private and public sector pension funds, family offices, and insurance asset managers.
The findings indicate a strong consensus among investors about their pivotal role in achieving residential property building goals in the UK. Half of the respondents (50%) strongly believe that institutional investment is essential for meeting these targets, with another 48% slightly agreeing.
This recognition is paralleled by predictions of escalated funding over the next five years. According to Downing’s research, 22% of investors expect a significant increase in funding for UK residential properties by 2028, while 72% anticipate a slight rise.
The study also highlights the residential properties likely to attract institutional investment. Mass market “for sale” residential housing tops the list, perceived as the most promising in terms of return on investment, with 60% of the respondents favouring it. This is followed by affordable housing (27%), single-family rental properties (12%), later living housing (3%) and multifamily rental property (2%).
Parik Chandra, partner and head of specialist lending, Downing LLP, said, “Institutional investors are aware of their significant role in assisting the UK to reach its targets for residential property development, and they are reinforcing this recognition with plans to increase their funding in this area.
“The focus of these investors on mass market residential housing aligns with Downing’s experience. We have observed a notable uptick in institutional investment in this sector compared to last year and expect this upward trend to continue.”
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