UK home applications increase, but foreign investment decreases

TerraQuest has published data showing that the number of housing planning applications has reached its highest level since 2022. During the same period, Real Estate:UK and CoStar Group reported that foreign investment in UK commercial real estate has slowed significantly. So, what is the current situation in the construction sector, and how will it develop in the future?

The main source: Housing up, overseas investment down, in Q1 2026

The current situation

A total of 71,028 housing unit applications were registered, marking the strongest first quarter for new housing applications since Q1 2022.. Affordable housing also saw a record start to the year, with 4,225 units submitted, which is the highest figure for any first quarter since the beginning of the decade.

Regarding commercial real estate, Real Estate:UK and CoStar Group found that total investment in UK commercial real estate reached £9.7 billion in the first quarter of 2026, which is almost 40% below the five-year average for the first quarter. In Q1, foreign capital accounted for £3.6 billion of investment, with inflows from the United States declining significantly after the record levels of 2025.

How will UK home applications and foreign investment move in the future?

This report indicates that investor demand for UK real estate remains stable. In terms of asset classes, healthcare was a standout sector in 2025, reflecting strong investor confidence in operational real estate supported by long-term demographic demand. Investment in build-to-rent construction also reached a record £5.6 billion, as foreign investors continued to focus on professionally managed rental housing, while office investment moderately recovered amid improving sentiment toward prime assets in London and major regional cities.

At the same time, portfolio transactions increased sharply across several regions, highlighting growing investor preference for scale and defensive income streams across sectors including healthcare, logistics, and residential real estate.

Fencyx, as one of the leading wholesale suppliers for the UK building industry, follows this situation closely. We confirm that demand for real estate in the United Kingdom remains high; however, investment activity has indeed slowed somewhat due to external factors.

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