Ahead of the Living UK Conference on 22nd September at The Oval Cricket Ground, we sat down with Simon Scott, Lead Director of Living Capital Markets at JLL, to get his view on where investment is flowing, what has changed in the market over the last five years, and whether the cogs are starting to turn on delivery.
Where are investors putting their money in terms of sectors and geography?
The most activity we have seen this year has been in existing portfolios of standing residential stock. I am principally thinking about the sale of the L&Q portfolio and Vanguard — the Folio portfolio for Notting Hill Group that is in the market alongside Project Carbon the portfolio we are currently trading for Greystar and Adia. What is consistent across all of those is London and the South East, existing income-producing stock. There are certainly examples of that in the single asset space too, with the Reading MGT and PIC deal being one of the largest single asset trades from earlier in the year.
Single-family housing continues to attract strong interest. We have done another large deal with Lloyds and Barratt during the year, with a quantum of a few hundred million pounds. And we have seen Leaf — the Blackstone-funded platform — trade what is reported to be around £400 million of stock to Border to Coast, the local government pension scheme.
Activity in the student housing sector has slowed over the last twelve months but there is a lot of deal activity, its just slow! We have seen some significant trades in the healthcare sector, and the fundamentals of accessing later living and healthcare remain. But I have to say, in nigh on thirty years of involvement in purpose-built student accommodation, there is some genuine nervousness in that space — principally around affordability and what AI in particular may mean for that sector from an investment perspective going forward.
Are investors now looking away from the UK and to mainland Europe instead?
Fundamentally, no. The way I would articulate pan-European exposure is that the UK has often formed the landing pad for international investors looking at living across Europe. Student is probably the one area where you might make a case that the UK’s relative maturity has prompted more interest in European markets first. But to suggest that investors have simply pivoted away from UK build-to-rent or healthcare assets towards Europe instead would not be right in my opinion.
What has changed in the last five years?
The challenges around development viability, legislative change and the political environment are all fundamentally more difficult than they were five years ago. The underlying thesis for investing in living has not changed — the demand drivers remain compelling. But what has shifted is the growing move toward existing assets rather than development. A few years ago, you would have wanted to acquire income-producing stock but it simply was not there. Now there are meaningful opportunities to access that stock more readily. You have also seen a little less activity from what most people would regard as core investors, which is a reflection of the volatility we have all been navigating.
Are the living sectors now more portfolio trading markets than delivery markets?
Absolutely. The barriers to entry from a viability perspective — building safety regulations, the cost of money, yield movement — have changed quite considerably over recent years. The whole landscape around cost, legislation and viability has made development extremely challenging. So yes, the focus has very much shifted toward existing stock rather than development-led activity.
How do we get delivery going again in the living sector?
There is really not just one lever you can pull in isolation that will open the floodgates. We need to see consistent interest rate reductions to shift people’s perception on risk-free rates and the required margins. Beyond that, grant support has a role to play, and the National Housing Bank and Homes England are very much aware of that. Some of the GLA’s special measures around reducing affordable housing contribution requirements to improve viability are also moving in the right direction.
The realistic path to driving development activity is the marginal gains principle — chipping away, creating an environment that encourages development, and hoping that everything gradually falls into line. The message coming through clearly from Homes England and the National Housing Bank is that they are open for business and listening. But I think it will be a culmination of market confidence, interest rate movements and softening of build cost inflation that eventually shifts things, rather than any single intervention. Where that is insufficient, we are looking at government support through grants, guarantees or interest rate savings to enable development to progress.
Are the cogs starting to turn again or is viability still very difficult?
Viability is incredibly difficult. I do not think I have known it to be more difficult than it is today. In terms of whether the cogs are turning, there are encouraging signs. It was significant that Angela Rayner came out relatively recently to confirm that rent controls are not something the Government is looking to introduce. I can say from personal experience that we have had international capital get spooked by the prospect of rent controls and pull out of deals entirely. So clarity on that point really matters.
Similarly, the signal from Homes England and the National Housing Bank that they are open for business and willing to support delivery is genuinely encouraging. Once that support begins to gain momentum, I have no doubt it will start to make a difference.
The area I am most intrigued by is the role of institutional capital in the affordable housing market — specifically where for-profit registered providers, capitalised by private capital, fit into that picture. That is probably another area that has developed considerably over the last five years and one that will be fascinating to watch as it continues to evolve.
Simon Scott will be speaking at the Living UK Conference on Tuesday 22nd September 2026 at The Oval Cricket Ground, London. To book your place, visit resilivingevent.com.