UK Living Roundup April 2026

Back in February, our 2026 UK Living Outlook report took a relatively positive view of the year ahead. Inflation was forecast to fall, a couple of interest rate cuts were on the cards and investor sentiment was improving. Investment volumes would grow, but not necessarily until the second half of the year – or even 2027. But there was a caveat that turned out to be prescient less than a month later: “the risk of further shocks cannot be ruled out”.

It’s within the context of those further shocks in the form of the conflict in the Middle East that we collected our Q1 Living investment volumes – which were mostly in line with what we expected, with one notable exception.

In this roundup

• Student drives Living investment in Q1
• Multifamily records its largest single deal to date, but…
• BTR growth halves

UK Living – BTR, student, healthcare and affordable – started the year with a healthy £3.7bn of investment, up 31% on this time last year and 13% above the five-year average. But 60% of it came from PBSA, which had its fifth highest quarter on record at £2.2bn.

At a time of increasingly challenging policy for international students, it was a seemingly gravity-defying result. The only other times we’ve seen volumes this high were when huge portfolios traded: IQ (Q2 2020), Student Roost (Q4 2022) and Liberty Living (Q1 2015 and Q4 2019).

While there was a similar acquisition in Q1 with Unite completing its purchase of Empiric Student Property in January, it accounted for less than a third of the quarter’s total volume (compared to more than 80% when Student Roost and IQ sold). In other words, there was more activity outside of the one big deal.

In fact, if we were to remove the largest deal of every quarter on record, Q1 2026 would be the second highest after Q1 2015.

But let’s not get ahead of ourselves. A strong quarter of investment reflects deals that have been in the works for months, rather than sentiment at the point we send out a press release. And Q1 was particularly reflective of the time it takes deals to complete transactions. The most obvious example is the Unite/Empiric deal itself, which was announced in August 2025, approved by the Competition and Markets Authority in late November and completed on 28 January.

Another major deal counted in Q1 was the £390m Cambridge Halls project between Unite and Manchester Metropolitan University, which saw Unite picked as the preferred development partner last May.

Even so, Q1 was indicative of some of the trends we’ve expected to see in student housing this year, particularly with investors becoming more selective in their acquisitions: more than 90% of investment outside of the Unite/Empiric deal were in cities with Russell Group universities.

Despite the challenges facing the sector – both on a macro and micro level – Q1 indicates that it went into 2026 in a relatively strong position. As selective as investors may be, there is appetite for PBSA in the right place and at the right price. 

Less surprising than a record quarter for student was the subdued one for BTR. Investment in the sector amounted to just £736m – the lowest Q1 since 2017. At £257m, multifamily investment fell to its second lowest quarterly total over the last decade – only marginally ahead of Q3 2023 – but it was partly balanced out by a relatively strong start for single family at £479m (+4% vs the five-year Q1 average).

But there was a clear bright spot: Pension Insurance Corporation acquired Lincoln MGT’s Ebb & Flow scheme in Reading for £200m in what was the largest single operational multifamily asset deal to date. The pricing demonstrated strong conviction in the sector for assets in good locations. As of April, the JLL continues to maintain prime BTR yields at 4.50% in the South East and 4.25% in Zones 1-3 London.

Meanwhile, most of the single family total came from Kennedy Wilson and Canada Pension Plan Investment Board’s continuing their expansion in the sector with a further £300m of investment. This helped propel single family to a record 63% of BTR investment over the 12 months to Q1.

The challenges to development in recent years – from viability to delays in Gateway approval – are increasingly evident in the size of the operational BTR market.

Up until the end of 2024, the number of completed multifamily homes was growing at a pace of around 20% per year. Since then, the rate of growth has halved to 11% as of Q1 2026 off the back of a shrinking pipeline.

The number of units under construction has fallen 10% in the last year, while the number with planning consent is largely flat. In total about 88,000 units either have consent or are under construction – the lowest total since 2022.

As a result, even cities where BTR has grown significantly in recent years, such as Birmingham and Leeds, risk facing an undersupply in the medium to long-term. Coupled with expectations of some smaller landlords leaving the market due to the higher regulatory burden of the Renters’ Rights Act, this further increases the need for delivering more housing across the UK private rented sector.