Savills has raised its outlook for the average total return for the next five years for U.K. real estate in its 2026 cross-sector outlook, forecasting an average return of 7.8 percent per annum (pa), up from 7.4 percent pa in 2025, with the international real estate advisor saying that the United Kingdom’s outlook is more stable than it was a year ago.
In its annual cross-sector forecasts, covering the commercial, residential and rural sectors, Savills says that the importance of income in delivering real estate returns has risen across the board, primarily due to the expectation that the pace of interest rate tightening will slow and that the transmission of base rate cuts to the bond market will be slower than it expected in 2025.
Shopping centers and buy-to-let residential in Yorkshire & Humber come top of Savills ranking for comparative returns for investors over the next five years, although their returns profiles are quite different. Savi
