Is commercial property investment in trouble?

Beleaguered buy to let investors seeking alternative opportunities with commercial property may think twice.

Leasing demand for offices in London dipped by 11% in the second quarter of 2026 compared to the same period last year, according to Rightmove.

Nationally, demand to lease office space fell by 2%. 

But Scotland (+11%), the East Midlands (+1%) and the South East (+1%) recorded growth in leasing demand for offices in Q2. 

Indeed, office leasing demand is in negative territory across 10 of the 11 key London boroughs covered by Rightmove’s Commercial Insights Tracker. 

Lambeth (+1%) was the only area to record growth.  The hardest hit borough was Kensington & Chelsea (-34%), followed by the City of London (-30%) and Hammersmith & Fulham (-26%).  

However, experts suggest that the drop in demand for office space is more complex. 

While demand is increasingly waning for older, poorer quality office space, experts say demand is still extremely strong for more modern, energy efficient working space. 

Louise Sedgwick, commercial director at Rightmove, says: “It has to be remembered that 2025 was a strong year for office demand on our platform, so this quarter’s annual drop is against a high base. 

“Moreover, the headline statistics don’t tell the whole story. Demand in the London office market is becoming increasingly concentrated on the best-quality office space, with well-located Grade A buildings offering high levels of amenities and strong environmental credentials continuing to outperform.” 

She adds: “On the other hand, secondary office spaces, especially in less attractive locations are struggling. This isn’t just a London story – it’s something that we’re seeing in commercial centres across the country. Indeed, it’s also something that is being reported in major office markets in many European cities.”