Fundraising is expected to recover in the new year as investors begin to look again at the UK and Europe, according to Preqin’s ‘Real Estate in 2026’ report.

Preqin noted that steady inflows of capital into Europe, including the UK, could improve dry powder levels, support deal activity in 2026 and beyond and help revive property prices and fundraising momentum.

This trend is expected to be most visible in the early years of the forecast period, with normalisation later on.

The report highlighted that investor confidence in UK real estate is improving. In Preqin’s November 2025 survey, 24% of investors identified the UK as one of the developed markets offering the best opportunities, marking a clear increase on previous years. Fund managers echoed this sentiment, with 26% highlighting the UK as an attractive market.

This shift reflects a perception that pricing has adjusted, risks are better understood and long-term fundamentals, particularly in living sectors, remain intact.

Preqin expects investor momentum behind Europe-focused real estate funds to remain resilient into 2026, with the UK benefiting from this renewed interest. While the market is unlikely to experience a rapid rebound, improving sentiment, policy-driven housing supply and gradual capital reallocation suggest a more stable foundation is forming.

Meanwhile, the report highlighted that the UK stands out among major global economies for the persistence of higher interest rates. Alongside the US, it remains some distance away from the rate-cutting cycles already under way in parts of the eurozone and APAC.

Softer monetary conditions elsewhere are expected to support fundraising and deal activity more quickly than in the UK, where elevated financing costs continue to suppress transaction volumes and weigh on values.

For UK assets, the implication is a slower recovery curve, with pricing and liquidity lagging behind some international peers.