A year into Labour’s term in office, the government is under mounting pressure from property investors frustrated by a lack of progress on planning reform and insufficient incentives for developers and institutional capital.
According to a new survey of high-net-worth private clients by specialist real estate lender ASK Partners, the top criticisms of Labour’s first year centre on its failure to deliver meaningful planning system changes and implement targeted tax incentives, both key manifesto promises.
Despite pledging to build 1.5 million homes over five years and announcing intentions to fast-track approvals, reclassify parts of the green belt, and increase affordable housing quotas, investors say planning delays, political uncertainty and fiscal unpredictability remain the sector’s greatest headwinds.
ASK’s research reveals that 51% of respondents still plan to increase their allocation to UK real estate over the next 12 months.
INVESTMENT OPPORTUNITIES
The top investment opportunities identified are in data centres, warehousing and logistics, and later-life housing – sectors aligned with structural economic shifts, demographic change and digital transformation.
Real estate debt is also seen as a compelling route to market exposure, with investors citing its attractive risk-adjusted returns, asset-backed security, and relatively low volatility compared to equities.
With ASK Partners managing a loan book of around £2 billion, demand for structured debt remains robust, particularly among those seeking steady income and capital preservation.
CAUTIOUSLY OPTIMISTIC
Daniel Austin (main picture), Chief Executive and co-founder of ASK Partners, reckons investor sentiment remains cautiously optimistic.
He says: “After a year under the new government, investors remain frustrated by the lack of meaningful planning reform and limited incentives to drive development. Yet over half still plan to grow their property exposure, a sign of confidence in the long-term fundamentals.”
He adds that the strongest momentum is in data-led and residential sub-sectors such as build-to-rent, co-living, and student housing, while demand for digital infrastructure is being accelerated by the growth of AI and cloud computing.
To unlock growth, investors believe the government must prioritise reforming planning processes, offer tax incentives, and introduce measures to attract international capital. Without these changes, they warn, the UK risks falling behind global competitors in real estate investment and development.
