This is my first comment piece as chief executive of Real Estate:UK (RE:UK) – and what a world we find ourselves in. We’ve been thrown back into a vortex we thought we had escaped: significant political turmoil and instability at the heart of government, culminating in yet another change of prime minister.
Vanessa Hale
Against this backdrop, and that of the wider global and domestic economic challenges we face, it is more vital than ever that our industry speaks with one voice to government and global capital looking to invest in the UK.
With RE:UK now entering the third month of its existence, we have that one collective voice for UK real estate. Our objective as an organisation, and my mission as its inaugural chief executive, is to champion and represent the breadth of the real estate sector across the UK. I want us to be the vehicle that drives transformation of the industry, through public policy where necessary, independent research and peer-to-peer learning where possible.
There has never been a more critical time for the sector to come together and articulate real estate’s role in the UK
This aim has been further bolstered by the formal launch on 23 June of Real Estate:Scotland, building on the excellent work of the now former Scottish Property Federation, Association of Real Estate Funds (AREF) and Investment Property Forum (IPF), plus all relevant partners and members.
This range and breadth of advocacy for the industry comprises institutional and private investors, property companies, developers, asset owners and managers, and the huge array of service providers that support them. Together they represent nearly £1trn of economic potential and support hundreds of thousands of jobs across the UK.
There has never been a more critical time for the sector to come together and articulate real estate’s role in the UK. From underpinning a successful economy to delivering an industrial base fit for the modern world, including everything from deploying AI to defence of the realm, building homes and transforming places and spaces to create successful and healthy communities, our industry has a vital role to play.
But we cannot be oblivious to the headwinds facing us. Inflation looks set to remain above the Bank of England’s target for the rest of the year. Interest rates are also likely to remain higher for longer in response to the wash-through of the Iran war, among other factors. Overlaid with this, we have an erosion in construction sector capacity, and barriers to new developers entering the market have never been higher.
These all contribute to the core challenge of development viability, which has seen housing development slump to some of the lowest levels in 20 years and commercial development remaining economically unviable across the UK.
More political uncertainty
We can add to this the return of political uncertainty and yet another PM, despite 2024’s election of a large Labour majority. More will follow in the next few weeks on what the agenda of Sir Keir Starmer’s successor will look like, but suffice to say during this transition the need to steady the ship and reassure investors in UK plc will be paramount.
Broad horizons: RE:UK aims to build awareness in government of property’s wider role in the UK economy
Credit: Shutterstock/ Ultraskrip
RE:UK will continue to promote the UK as an attractive destination to attract and stimulate domestic and global investment. Despite political uncertainties, the fundamentals remain strong: a stable economy and transparent legal system; a world-class higher education system, especially in the realms of harnessing AI; and London’s pre-eminent role as a global destination.
We will support the new administration in making sure its policies deliver the new homes, communities, economic growth and carbon-reduction targets we collectively need and want to see translated to reality. Enhanced and accelerated devolution is likely to feature strongly in government policy. This presents some potential challenges for real estate, but also opportunities if the right powers are devolved to the right level, and a mindset of partnership working with our industry is embedded.
However, I say from the outset to this new administration that we will be a constructive friend, not a passive industry body. On issues that affect our members and the real estate sector, we will not hesitate to push back where needed.
But let’s hope we don’t need to, given our objective is to work with national, regional and local governments to make sure policy is well informed and delivering the shared positive outcomes for communities both they and we want to see.
We have a big job to do, but we are building on strong foundations from the achievements of AREF, the British Property Federation and the IPF and their leaders over many years. Will the mission ahead be tough? No doubt. Are we ready for that? Absolutely.
Vanessa Hale is chief executive of Real Estate:UK