The UK hotel deal market is rediscovering its confidence…one property at a time. According to data from Savills, Q3 2025 hotel investment volumes climbed 28 per cent year-on-year to over £1 billion, powered not by blockbuster portfolio transactions, but by a surge in single asset deals, with domestic owner-operators being more active and outperforming regional markets.
Single asset dominance
Single asset deals accounted for 92 per cent of all activity in the third quarter of the year, with these single asset deals up 42 per cent year-on-year and 58.6 per cent above the 10-year average.
David Kellett, head of hotel capital markets, EMEA at Savills, notes that the single asset dominance is more due to a lack of portfolio trades as some who bought big in 2024 employed a strategy to buy wholesale and sell retail.
“Some of that stock is now coming through the market this year, he says adding “You’re also seeing smaller owners, including family businesses, selling, sometimes driven by tax changes.”
Additionally, he opines that the single asset deal dominance may reflect some testing the market.
“A lot of the transactions that we saw on the way out of Covid were single as some test the market with a single asset. We’ve just seen the volumes come back through single deals more than big portfolios, because when you’re bringing a large portfolio to market, you want all the conditions to align, particularly on the debt side.”
Trading performance over the past few years also plays a part.
“Revpar recovery post-Covid has been strong,” Kellett said, “but UK performance is flattening off a bit this year.” For some, that plateau is a signal to sell and crystallise gains.
“Investors are saying, ‘It went up a lot, now it’s stable. Maybe now’s a good time to sell.’ Even though yields have moved out, many are still in profit, and that’s a big driver of what we’re seeing. if you think the yield environment is stable and the profitability is flattish, then it could well be a good time to sell.”
A market for the nimble
And in this environment, domestic owner-operators have stepped up as key players, accounting for 45 per cent of transaction volumes in 2025, up 4 per cent year-on-year and 77 per cent above the 10-year average.
This surge, according to Thomas Emanuel, head of hospitality thought leadership EMEA at Savills, is typical of early-cycle recovery behaviour:
“When you go through these cycles, the buyers that come back first are usually high net worths and domestic owner-operators. They’re nimble, often cash buyers, and don’t have an investment committee slowing them down.”
For these operators, opportunities often lie in assets that can be improved or repositioned.
Recent activity of groups like Arora are emblematic of this homegrown resurgence where high net worth buyers double down on markets they know intimately.
“We've have quite a few high-net-worth investors that like the sector coming back in and buying in scale.”
Their activity, Kellett adds, is an encouraging signal: “When you start seeing these big single asset trades from seasoned high net worth investors, it’s a positive indicator that momentum is building.”
The regional story
While London accounted for £697 million of Q3 transactions, the real story lies beyond the capital and into the regional markets. Savills data show that regional volumes year-to-date totalled £1.3 billion, more than double the same period in 2024, with Scotland, the South West, and the West Midlands leading the charge. Scotland recorded year-to-date activity of £316 million, up 85 per cent year-on-year; the South West reached £180 million, up 360 per cent and the West Midlands hit £256 million, a 310 per cent rise.
“One of the main things that's driving the regions is they're just they're continuing to perform much better. That’s where we're seeing the strongest growth year on year. While a lot of the biggest cities are flattening out, the regional markets are still doing well. Domestic demand remains strong,” Emanuel says.
Performance standouts include Edinburgh and Glasgow as well as Liverpool and Cardiff, where major events have fuelled demand. Manchester, despite an increase in new supply, has also maintained steady performance
Training for the marathon
Both Kellett and Emanuel see the current phase of a surge in single-asset transactions, domestic operator expansion and regional strength as a foundation for the next cycle.
“These trends suggest a more resilient UK hotel investment landscape,” Kellett says. “When you see that sort of volume of single asset trades, it’s a sign of resilience. It signals that we have a good base for bigger transactions to come back over the next one to two years.”
While there have been fewer portfolio deals, that balance is expected to shift as debt markets stabilise and funds start to recycle assets. He expects that shift to materialise in 2026, as private equity groups look to realise investments and support new fundraising.
For now, however, single asset dominance defines the UK market as it works towards the future.
As Kellett puts it: “It’s like training for a marathon. You have to do a lot of training at low intensity to build a strong base. I think in the next couple of years we'll get some more exciting stuff coming through.”