Record £65bn 2014 Investments Higher Than Pre-Recession Levels In 2006

Real estate investment in the UK hit a record high in 2014, 16% higher than 2013 and 3% above the pre-recession peak in 2006, according to new figures released this week.

The report shows that the UK is the second-largest commercial property market in the world, accounting for 18% of all global transactions.

London was the leading global destination for real estate investment in 2014 with £27.5bn of transactions, two-thirds of which came from overseas. US capital provided 11% of the UK’s total volumes, followed by Chinese capital at 4%.

However, it was growth outside the capital that drove the record-breaking levels, with a 70% rise on the previous year. The South East, Scotland and the West Midlands recorded the biggest investments, earning £5.7bn, £3.2bn and £2.7bn respectively. It was Scotland that saw the biggest proportional growth, with an 82% increase on 2013 volumes.

Jon Neale, Head of UK Research at Jones Lang LaSalle, said: “As a result of ageing populations and growing global affluence, there is an ever-growing weight of money desperately seeking yield. The UK property market is likely to continue to offer stronger returns than most other asset classes.

“This is reinforced by rising confidence in the UK economy, not just in London but in the regions. Moreover, with base rates likely to remain at their record low levels for the remainder of 2015, the income available from property is likely to remain very attractive over the whole of the year ahead.”

Expert Opinion

"This data confirms the surge in transactional activity that we have seen outside London in the last 18 months as investors look to the key regional towns and cities in the UK for better returns. We believe this will continue as the overall economic outlook remains positive although uncertainty over the outcome of the General Election may cause some investors to pause in the first half of 2015."