Update

UKREiiF 2025 real estate debrief and current outlook

Last month (May 2025) the UK's Real Estate Investment & Infrastructure Forum (UKREiiF) returned to Leeds. This significant and rapidly-growing annual event brings together the key decision-makers from across the real estate sector, and this year attracted over 16,000 people to the city.

A number of the firm's real estate specialists attended this year's event. Below, Carl McConnell shares his insights.

UKREiiF 2025 - A debrief  

Reflecting on UKREiiF, it was interesting to see the sentiment from all of the real estate ecosystem of professionals in attendance. Once again, the event was packed with local councils looking to collaborate (a word I heard a lot at the conference) with the private sector to unlock potential growth opportunities in their area.

There is always a huge array of talks throughout the event. The ones that I attended were focussing on ways to unlock growth, how to overcome the current challenges to meet housing targets, emerging sectors and building safety act compliance.

According to the survey conducted by UKREiiF, positive sentiment for the UK market was up from last year with 70 per cent of respondents saying they were positive on the UK market (up from 52 per cent the prior year). However, while confidence has risen, there remain a number of key challenges facing the sector. According to the poll, the top five of these include:

1. Geopolitical instability
2. Inflation and increasing costs
3. The UK planning system
4. The UK political landscape, and
5. The cost and availability of finance, all of which the sector will need to navigate or overcome.

The key challenges were discussed at depth at many of the talks I went to. One panel chair promised not to turn their discussion into a 'whinge-a-thon', so with that in mind, I thought it would be better not to simply relay all the issues that had been raised, but rather present some of the possible solutions I heard too!

Some solutions posed to help unlock growth in the UK market are outlined below.

Reduce the Gateway delays

Gateway 2 is the second stage of building safety regulations where high-risk building designs are submitted and checked by the Building Safety Regulator (BSR). Approval is required before construction can commence but the BSR have been slow and severely under resourced to cope with the demand.

One panel mentioned that applications had been rejected on the basis of things as minor as spelling mistakes, failure to specify the colour of skirting boards, or not detailing in the plan where an evacuation sign will be. The level of detail required, in addition to the lack of any clear agreed pro forma way of submitting proposals, means there is still a lot of uncertainty around best practices and what should be included.

A panellist from Ireland-based international property development company Ballymore mentioned that even a well-established developer like themselves have schemes which have been stuck at the Gateway 2 stage for over 65 weeks.

The upfront cost of getting all of the advisers input on the design, plus the time lag in getting approval is really affecting returns and viability, and lenders and investors are now not committing until Gateway 2 had been achieved.

Some solutions to address this I heard include:

• Bolstering the resourcing at the building safety regulator;
• The BSR giving approvals with recommendations or conditions on things to change or add in order to allow buildings to commence work;
• Some greater guidance on the application requirements and 'what good looks like', with a standardisation of the information submitted; and
• Upgrading the systems to utilise AI and allow for large documentation to be uploaded in an easier way.

Housing and affordability

The shortage of housing and the fact that owning a property is becoming increasingly inaccessible for a large proportion of the population is being acknowledged as a crisis within the industry and the government. Government initiatives are required to help bridge the affordability gap and to achieve the 1.5 million new homes targeted by the government.

Some possible solutions mentioned:

• With up to one million vacant homes, according to Action on Empty Homes, there is increasing appetite for long term vacant homes to be purchased under the compulsory purchase scheme and reused, which will help alleviate some of the housing shortage.
• Increase of government backed shared equity and help to buy schemes to assist those looking to get on the property ladder.
• Tax breaks or incentives (such as an SDLT break) for those looking to downsize their house to free up homes for others looking to move.
• More flexibility from local councils around the affordable housing requirements. For example, often when developments are built there is a requirement for at least 35 per cent to be affordable, and these are managed by registered housing associations. However, they do not tend to like managing a small number of units within a larger scheme and would prefer designated schemes. Can there be a financial contribution towards affordable housing instead, or can the developer be allowed to change their permissions to sell the affordable units at a discounted market price as opposed to keeping it for affordable renters?

Sustainability and net zero

Sustainability and net zero is still a target – but scale of retrofit is huge. In order to achieve net zero, it will require old homes and buildings to be retrofitted. It was noted that some 19 million homes in the UK are currently below EPC ratings.

There is still a narrative by the installers and advisers to private individuals that the newer forms of energy sources such as solar and air source heat pumps are not worth the upfront cost, and that needs to be changed.

At one of the panel sessions, Barclays announced that it had teamed up with The National Wealth Fund (NWF) to make loans available for retrofitting, with the NWF acting as guarantor on lending.

There will no doubt be a need for more of these sorts of initiatives and incentives to encourage more people to make the switch.

Emerging sectors are energy, tech and infrastructure

Demand for affordable power is drawing energy-intensive sectors (like data centres) to the UK, with potential to use the significant renewable energy produced through the various wind farm and other clean energy projects.

It was noted that a rise of data centres in Ireland led to them consuming over 20 per cent of the country's national power. Therefore, using a jurisdiction such as the UK which potentially has lots of renewable energy will be attractive to data centre operators.

The UK's comparatively high energy costs mean that advanced power purchase agreements are emerging as critical tools to encourage investment.

Interest is growing in storage-to-energy infrastructure (e.g., compressed air, hydrogen) and battery/pump hydro solutions, with the potential to export renewable energy.

Green shoots!

At the start of the conference, Deputy Prime Minister Angela Rayner delivered a keynote address where she reiterated the government's plans to press ahead with speeding up housing delivery, modernise the planning committees, and bring in a new system of strategic planning. 

Within the announcement were some nuggets which suggest Labour is trying hard to address the needs of the industry, such as:

• Making the Affordable Homes Programme more flexible so that all of the £8 billion funding is utilised;
• Aiming to deliver the largest wave of affordable and social housing in a generation;
• Planning system reform and recovery plan to reduce delays;
• Reform to renters' rights through the ban of no fault evictions and improving tenant security;
• Investment in construction skills and jobs

Time will tell whether the intentions of the government can be turned into reality.

There has however been increased interest in stabilised buildings and portfolios with office, logistics and student accommodation being under offer with a number of our clients at the moment.

If you have any questions or would like to discuss the issues covered in this article in more depth, please get in touch.