Investment in the UK’s build-to-rent sector fell to €5.9bn (£4.95bn) in 2019, down by 14% on the previous year, as investors held off amid political uncertainty.
This compares to €6.8bn (£5.7bn) in 2018, according to JLL’s latest European Multifamily Investment report.
JLL said cautious investors remained on the sidelines, waiting for the result of the General Election and greater certainty on Brexit.
In Europe, investment in BTR dropped by 7% to €55bn (£46bn).
Despite this, it was the second-highest year on record, after 2018, with spend bolstered by a few key markets.
JLL said the market performed above expectations, with growth concentrated in mature markets such as Germany (€20bn, up by 8%) and the Nordics (€12.8bn, up by 7%).
These regions contributed 59% of the total investment across the continent.
JLL predicted a market recovery for the UK in the first half of 2020, with fresh investor confidence and pipeline deals expected to complete.
Recent data from the Office for National Statistics supports this, with sustained private rental growth providing certainty for the sector.
Private rental prices paid by tenants in the UK increased by 1.5% in the 12 months to January 2020. Paid prices in London increased by 1.3%, compared with 1.6% in the regions.
The ONS reported a year of acceleration in rental growth, following three years of slowing growth.
Philip Wedge-Bernal, living research and strategy associate for EMEA at JLL, said: “The Conservative victory and the formal departure of the UK from the European Union are likely to bring improved investor confidence in UK multifamily for 2020, and we expect a greater pool of international investors to look at the UK as an attractive place to deploy capital.”