Housing Market Trends
Affordable housing requirements, long cited as a brake on viability, have been temporarily reduced from 35% to 20% for schemes on private land, with 60% of that affordable element required as social rent. The measure, in place until 2028 or the next London Plan, aims to unlock stalled projects and rebuild confidence.
As always, the devil is in the detail. How these changes filter down through boroughs, planning committees and viability teams will determine their true effect. The intention is clear: to get spades in the ground, but policy can take time to find traction. One developer put it well:
“We need demand-side policies as much as supply-side ones.”
Reducing quotas may help, but it isn’t a silver bullet. Without renewed buyer confidence, cheaper finance and stronger rental demand, the gears of development will still turn slowly. Still, after months of speculation, it is encouraging to see movement. Many of the people we met this summer were calling for exactly this.
Housing remains challenging. Higher-than-zero interest rates have dampened demand and reduced yields, with bonds seen as the safer investment. Inflation has been stubborn, and rates haven’t fallen as quickly as many hoped. When they do, confidence and capital may start to flow back into property.
Momentum is strongest in co-living, where higher densities are making schemes viable. It speaks to a generational shift: young professionals choosing shared living close to the city over ownership, shaped by affordability and lifestyle. Whether this continues as interest rates fall and build-to-sell re-emerges remains to be seen.
BTR and PBSA are still progressing in strong regional markets such as Manchester and the North West. Later living is evolving too, moving from build-to-sell to BTR models as developers look to manage service charges and resale risk. The fundamentals remain strong; demand will only rise as we age.
High-Risk Building (HRB) regulations have prompted some to reduce height to stay below the threshold, a reminder of how quickly the market adapts. Others are turning attention to single-family dwellings at the edge of towns and within the green belt, where low-rise avoids HRB complexity.
Affordable housing faces real strain. Many housing associations are struggling to take on allocations, delaying major projects. The emergence of profit-making housing associations feels like a sign that the current system is under pressure.
In the commercial sector, hybrid working continues to reshape demand. Owners are taking losses on secondary offices, while AI could further reduce the need for peripheral workspace. Yet the City and West End remain strong. Midtown is quieter, but the message is consistent: if people are coming into the office, they want quality, light, amenity and life around them.
Hospitality is also on the rise. Hotels, restaurants and mixed-use leisure schemes are gaining ground as people prioritise experience and flexibility. Older offices are being repurposed into hotels or hybrid hospitality-led developments, blurring the boundaries between work, living and leisure.
We have recently been reappointed on a new City project that embodies that spirit: new offices, new landscapes, new places, while nearby sites convert to residential, PBSA and co-living. Location, location, location has never felt more true.