The best real estate opportunities to invest in for 2026

It’s been a mixed year for the housing market but the door is still open for investors to make money from bricks and mortar in 2026.

Slowing house price growth, higher taxes and extra rental regulations have made investing in property more tricky in recent months.

But experts claim there are still reasons to back real estate, especially with the prospect of interest rate cuts in the coming weeks.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Big themes for investors include the return-to-the-office and the rise of online shopping.

Daniel Austin, chief executive and co-founder at specialist property lender ASK Partners, said: “The 2025 Autumn Budget offered limited stimulus for the housing market and, persistent headwinds such as sticky inflation, higher for longer interest rates, elevated construction costs, and slow planning processes continue to impact development viability.

“But there are still reasons for cautious optimism. The UK economy is forecast to grow by 1.4% this year. This is expected to outperform the eurozone and should support investor confidence.

"The UK also remains an attractive destination for global capital, with ongoing interest from the Gulf, Southeast Asia and deepening UK United States investment links, particularly through the technology sector.”

Here are the emerging trends in real estate for 2026 and how to invest in them.

Prime offices

Many companies are reducing remote working and getting staff to be in the office more frequently.

Austin suggests businesses are competing for modern, energy efficient and amenity rich workplaces that support hybrid working.

He said: “Best-in-class offices in central London continue to achieve strong rents and stable yields."

The rise of build-to-rent

The UK housing market continues to be hit by a lack of supply.

The government is pushing planning reforms through parliament to boost development but there are also fears that landlords could exit the market due to new rental regulations and higher taxes.

Build-to-rent - developments typically run by large institutional landlords - may fill that gap, providing an opportunity for investors. You may already have some exposure to this through your pension.

Austin said: “With so many smaller landlords exiting the sector due to increased costs and regulatory complexity, professionally managed rental formats are becoming more important. Build-to-rent and co-living are particularly well positioned to serve younger, mobile workers who seek affordability, connectivity and community. Mid-market suburban and commuter belt schemes may outperform prime central locations, especially in areas benefiting from new infrastructure such as the Lower Thames Crossing.”

Storage and logistics

Demand for storage and logistics is being driven by the growth of online retail as well as the growing adoption of artificial intelligence, cloud services and high-performance computing.

This means there is more demand for industrial sites to store goods for online deliveries and also hard drives to power cloud software.

Austin said: “Growing adoption of artificial intelligence, cloud services and high-performance computing is placing unprecedented pressure on power capacity and suitable land, making data centres an increasingly strategic real estate category.

“The combination of long-term contracted income, critical infrastructure status and limited supply of appropriate sites means this segment is likely to remain strong. Mixed-use industrial schemes that accommodate logistics, data infrastructure and urban services will offer particularly attractive, income-led opportunities in 2026.”

Hotels and hospitality

The transformation of under-utilised office buildings into hotels are creating new avenues for investors, according to Austin.

He said: “The asset class continues to appeal to private investors and family offices seeking income diversification and long-term value.”

Income producing operational real estate

Operational real estate, including healthcare, specialist care, education and supported living can provide stable and inflation-linked income streams.

Austin said: “Demographic shifts, including an ageing population and rising demand for specialist services, support the long-term resilience of these sectors.”

How to invest in real estate

Unless you are a property developer or landlord who can afford to build or manage one of these assets, one of the most common ways to gain exposure to real estate assets is through real estate investment trusts (REITS) or property funds.

Oli Creasey, head of property research at Quilter Cheviot, said: “The REITs own a portfolio of properties worth a certain value, and shares in the companies are traded on stock exchanges throughout the day.”

Most specialise in a particular sub-sector.

Creasey highlights Derwent London and GPE for development and ownership of London offices, while Big Yellow and Safestore are self-storage specialists.

Investors can get access to health care developments through Primary Health Properties and Target Healthcare, which owns senior living centres.

Meanwhile, Unite Group backs student accommodation, while Grainger does general residential rental.

For buyers not looking to specialise, Creasey says there are several funds that buy REITs but use them to create a more diverse portfolio including Columbia Threadneedle;s Property Growth and Income as well as TIME's Property Long Income and Growth funds.

There are also funds that create a diverse portfolio around a thematic approach such as Schroder's Global Cities fund which invests in REITs worldwide that own assets located in the top cities globally, while Gravis's Digital Infrastructure fund invests in REITs that are aligned with the ongoing technology revolution.

Ben Yearsley, director of Fairview Investing, suggests a broad based fund or trust that then leaves the sector and stock decisions to the fund manager is better than trying to gain direct exposure.

His favoured option is the TR Property investment trust managed by Marcus Phayre-Mudge.

Yearsley said: “It has a mix of UK and European property shares.

“Valuations are cheap and no one is interested on the sector. In addition with no speculative development in the past decade there are shortages of good quality property in many areas.”

For a sustainable option, Daniel Bland, head of sustainable investment management at EQ Investors, suggests the Schroder BSC Social Impact Trust, which backs social housing.