By Bilal Ahmed, Chairman and Founder of Sama Investments
As we reflect on the year gone by, it is fair to say that there have been plenty of ups and downs for developers – and 2025 looks to be no less eventful.
On the one hand the latest annual housing supply statistics show 198,610 new build completions in England for 2023/24. The figure is down 6.5% from the previous year and 9% below the 2019/20 peak.
Yet, this on its own does not tell the whole story. From an economic standpoint, the year turned out to be better than expected. Inflation was near, or at target, for much of 2024, while the Bank of England started its interest rate cutting cycle, and the economy began its road to recovery with growth of 1%.
Some property sectors including retail, commercial, and residential have seen a late boost, while there has been an increase in confidence and appetite for land, including from major housebuilders, with it becoming increasingly clear that the property market has potential to make big strides, particularly under the new Labour government.
The earlier than expected general election helped bring a level of certainty to the country. Among other key areas for the property sector it carried a key manifesto pledge to “Get Britain Building Again”, with a wide range of policy announcements and strategies to support this ambition as well as deliver on a 1.5 million new home target over the next parliament.
The government is also making the reforms needed to deliver sustained growth in the long-term. These include ambitious planning reforms to remove barriers to growth, the development of a 10-year infrastructure strategy to be published alongside Phase 2 of the Spending Review, and the publication shortly of the Devolution White Paper.
Elsewhere, a new housing package will include £500 million in new funding for the Affordable Homes Programme, and £3 billion of additional support will be provided to SMEs and the BTR sector by expanding existing housing guarantee schemes.
It also seeks to further attract investment as part of the growth strategy, including the launch of the National Wealth Fund, publishing the Industrial Strategy green paper, and hosting the International Investment Summit.
Some of the measures introduced in the Autumn budget will be challenging for property businesses of course, particularly the additional National Insurance Contributions effective from April 2025. Still, there is much to be positive about.
For the year ahead, it is set to be another important time for UK housing and real estate.
Following the period of uncertainty, there is optimism from many that those key economic indicators like GDP growth, inflation and employment rates will support healthier market conditions.
Buyers and investors are paying close attention to policy changes, especially those affecting affordable housing and green building incentives, which are expected to unlock new investment opportunities.
For developers and investors, staying ahead means adopting technology to track policy impacts, analyse sites, and assess project feasibility.
There are several Labour initiatives which could start to feed through. Not least the Invest 2035 strategy, with a vision to promote sustainable development, regional growth, and investment in infrastructure, as well as this the revised National Planning Policy Framework will introduce a new “grey belt” classification among other potential changes.
And as government investment and infrastructure projects take shape regional markets are likely to play an increasingly significant role – including in the North and Midlands.
As for key sectors, a stable economic and political backdrop will underpin investment into many, including the BTR sector. Meanwhile, PBSA will continue to thrive but will also face the challenge of keeping up with demand as the number of students across our educational institutions continues to grow.
Finally, healthcare investment volumes will continue to increase in 2025 following a surge in activity in late 2024, driven by increasing demand and needs. Strong operational performance, attractive lease features, and improving investment market conditions for a growing buyer pool will continue to attract investors to the sector.
