Real Estate 360° | 2025

Infrastructure and policy

The infrastructure challenge

A clear policy direction and investment in infrastructure projects are critical for growth. The UK has lacked a long-term approach for decades. However, looking ahead, 41% of respondents believe UK infrastructure will improve in the coming years.

Do you think that the government will deliver improved UK infrastructure during their 5 year term in parliament?

Yes

Unsure

Several announcements contribute to this optimistic sentiment. Approximately 25% of bills during the state opening of Parliament were infrastructure-related. A National Wealth Fund was formed, and The National Infrastructure and Service Transformation Authority (NISTA) was introduced to provide strategic direction. Invest 2035, a ten-year plan, has been launched to drive high-growth sectors and energy reform. Planning reform is on the horizon, and Skills England was established, with 50% of respondents believing it will help address the skills gap in the industry. Furthermore, the publication of the Industrial and Infrastructure strategies are expected in Spring 2025. It will be fascinating to monitor if these new policies realise change and the role the real estate and construction sector plays.

Melanie Leech

Chief Executive, British Property Federation

“Across the new industrial strategy paper, there is one sole reference to ‘real estate’, yet property underpins every part of our lives and business. From housing to commercial property and infrastructure, unlocking investment and the planning system are foundational to driving a modern industrial strategy.”

Energy - the cornerstone of infrastructure investment

Energy is undeniably a key focus area for infrastructure investment, with 57% of respondents highlighting it as a top priority to support the UK’s economic and net zero initiatives. Ensuring energy security and connectivity is vital for real estate projects, making it no surprise that 31% of respondents consider the establishment of GB Energy significant, with streamlining planning also identified as the other major enabler.

Given its importance, real estate businesses are likely to concentrate on investment opportunities in the energy sector. Projects involving data centres, renewables and a range of energy capture and storage solutions may emerge as promising operational or land development opportunities.

Which of the following infrastructure sectors should be prioritised to support the UK's economic and net zero initiatives?

Energy

Social (schools, hospitals, etc.)

Road

Rail

5G and Broadband

Terence Amako

M&A Partner, RSM

“Investing in infrastructure represents a significant growth opportunity for private capital. However, governments often lack the budget to bring their ambitious plans to fruition. To bridge this gap, collaboration between the private and public sectors is essential, paving the way for new funding vehicles to emerge. With clear regulatory regimes and robust subsidies, investment in infrastructure can truly flourish.”

The future prospects for housebuilding

The UK government's central commitment to “Get Britain Building” includes ambitious housebuilding targets. While only 31% of respondents believe these targets will be met, this is a more positive response than expected. Our respondents identified various challenges, resulting in a near-equal rating across several barriers. Housebuilders continue to struggle to progress planning on sites and cannot see buyer demand increasing in the short term, resulting in a hesitation to increase volumes. Additionally, there is a need for clarity from the government around infrastructure projects and stimulation to fund access to more labour and the use of technology.