As we move toward 2025, the UK real estate market is navigating a complex and ever-evolving landscape. Investors must weigh evolving factors such as political uncertainties, shifts in rental demand, and the impact of economic pressures on borrowing costs. Here’s five areas to watch in real estate in 2025:

The political landscape continues to present risks for real estate in 2025. Key uncertainties include potential changes in global leadership, especially within major economies like the United States, and the ongoing repercussions of the UK’s post-Brexit relationship with the European Union. Challenges around trade deals, tariffs, and economic isolation remain a threat to market confidence and transaction volumes.

For property investors and developers, these uncertainties make long-term planning increasingly complex. In a volatile political climate, many may adopt a more cautious approach, focusing on adaptable strategies to mitigate risk and anticipate shifts in policy.

The rental market is expected to maintain strong momentum as homeownership remains difficult for many. The discontinuation of government schemes like Help to Buy, combined with high mortgage rates and inflation, have left first-time buyers struggling. Consequently, rental demand, particularly in urban areas, is set to grow, with residential rents seeing double-digit increases.

Traditional buy-to-let investors continue to feel the pinch from a changed tax framework, increased regulations and a tougher compliance environment, reducing rental supply. This can only further elevate rents by reducing supply and underscores a shift towards Build-to-Rent developments. These purpose-built projects are designed with long-term renters in mind, providing stable and attractive returns for investors.

Interest rates will remain a key driver for the real estate market in 2025. Although expectations are for gradual reductions, borrowing costs will stay elevated compared to pre-pandemic norms due to broader economic pressures, such as high global debt and inflation concerns. For homebuyers, developers, and the buy-to-sell market, this means persistent challenges in accessing affordable financing and moving forward with large-scale investments.

The construction industry remains vulnerable to high inflation, despite anticipated base rate reductions. Rising costs for materials and labour have already strained smaller contractors, and a resurgence of inflation could see further financial stress. The introduction of a stricter regulatory environment under the Building Safety Act adds another layer of complexity and cost, potentially leading to delays in project timelines and further contractor difficulties.

Co-Living continues to gain traction in dense urban areas like London, appealing particularly to young professionals seeking flexible, community-driven living arrangements. These modern spaces provide not just accommodation, but a lifestyle—with shared amenities and communal environments fostering a sense of connection.

Investors are recognising the long-term growth potential of the Co-Living sector, which aligns with broader trends towards affordability and flexible living options. As housing costs remain high, Co-Living is poised to complement traditional rental models and become a key part of the housing market in 2025 and beyond.

Conclusion

The UK real estate market in 2025 is set to navigate a complex landscape shaped by political, economic, and regulatory factors. From political uncertainties and shifting rental dynamics to interest rate pressures and construction challenges, adaptability and strategic foresight will be key for investors. Emerging trends like Co-Living underline the sector’s evolution, offering flexible, community-driven solutions that resonate with changing market needs. As these dynamics unfold, the focus on resilience and innovation will define success in an increasingly demanding environment.

Important information

Past performance is not a guarantee of future returns. As with any investment, there are inherent risks involved in investing in any of our products and money invested may both increase or decrease in value and your capital is at risk. There is no guarantee that you will be repaid all of your invested capital.

No Ingenious Group company provides or is authorised to provide investment or tax advice.

Please note that the availability of Business Relief from Inheritance Tax and Investors’ relief for capital gains tax will be subject to the changes announced in the Autumn 2024 budget. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment. Take 2 mins to learn more.

It’s manifesto week so we thought we should join in and launch our very own Business Relief manifesto, setting out our commitments to advisers and their estate planning clients.

Just like the politicians, we believe it is time for a change and new ideas. So, we have developed a clear plan and have taken bold action to reform our solutions in order to deliver a secure future for Britain’s beneficiaries. On the doorsteps we hear that estate planning clients are looking to maximise the wealth they can pass to their families when they die, so they can enjoy financial security.

Clients want peace of mind that their estate planning will be a success and not fail as others have done in the past. Here is how we will do that;

  1. Deliver investment stability and growth – Our secured real estate lending investment strategy targets low volatility growth of 3-5%. Annualised growth since inception (31/12/14 – 31/12/23) has been in excess of 6%.

  2. Low costs – Keeping cost low means more money for beneficiaries. We have reduced fees and have some of the lowest costs in the unlisted Business Relief market.(Apex/Allenbridge review, September 2023)

  3. Tax efficient access – We understand that things change and investors may need access to their money. Our lending strategy is designed to qualify for Investors’ Relief with a low rate of Capital Gains Tax on disposal. 

  4. The IEP Apex triple lock – Through IEP Apex, we aim to mitigate the effects of IHT by investing in Business Relief qualifying investments, providing complimentary IHT insurance during the BR qualifying period, and ensuring proceeds are paid into a trust arrangement.

  5. National care service – We care about care, and believe everyone should have access to help and support if they need it. We provide complimentary access to a professional care advice service for all investors and their families.

Important information

Past performance is not a guarantee of future returns. As with any investment, there are inherent risks involved in investing in any of our products and money invested may both increase or decrease in value and your capital is at risk. There is no guarantee that you will be repaid all of your invested capital.

No Ingenious Group company provides or is authorised to provide investment or tax advice.

To learn more about IEP Apex, and its additional care service, click below, and one of our team members will be in touch. 

International Women’s Day is a global day celebrating the social, economic, cultural, and political achievements of women. The day also marks a call to action for accelerating women’s equality.

IWD has occurred for well over a century, with the first IWD gathering in 1911 supported by over a million people. Today, IWD belongs to all groups collectively everywhere.

What motivates you professionally?

A good, inspiring manager!

Davinya

HR Business Partner

I have always enjoyed a good challenge, and for me, the most fulfilling part of my job is being able to apply my skills to solve a problem for the business, be it analysing a dataset to identify a trend, or building a new forecast or model to help with decision-making. Working to solve new problems has also been great for picking up new skills along the way!

Kristiina

Finance Analyst

Tackling challenges.

Christelle

Investment Director

Helping the Real Estate team to find solutions and to manage risk appropriately. I also enjoy working with great people, sharing knowledge by training junior members of the team and in an environment where we are happy to challenge each other and have robust discussions.

Wensde

Head of Legal, Real Estate

What is your role and what does it involve?

A HR Business Partner
collaborates with business leaders to align HR strategies with organisational goals. We are responsible for talent management, employee relations, organisational development, and change management. We analyse data, provide HR guidance, and drive initiatives to support business success and employee engagement.

Davinya

HR Business Partner

As a Finance Analyst, my day-to-day work involves looking after the accounting and financial reporting for our IEP funds. I collaborate with various stakeholders in the business to get the most up to date information and then use this to prepare the accounts, monitor and report the performance of our investments, and analyse the key performance indicators that ultimately help management in deciding on future strategy.

Kristiina

Finance Analyst

I am an Investment Director within the Media Team which entails deploying capital in Film & TV projects as well as managing assets under our management to achieve optimum returns to our investors.

Christelle

Investment Director

I’m the Head of Legal in Real Estate so as well as providing internal legal advice on real estate fund matters, I work with my colleagues to execute real estate transactions efficiently and with an eye to managing legal risk.

Wensde

Head of Legal, Real Estate

How has being a ‘woman in finance’ impacted you professionally and/or personally?

It’s allowed me to work with many talented individuals who have helped me enhance and develop transferable skills. It’s also enabled me to flourish and know what kind of person and manager I’d like to be.

Davinya

HR Business Partner

I am very lucky in that here at Ingenious, we have a very inclusive workplace culture and I’ve always felt supported by the leadership as well as the fellow colleagues. At the start of my career, coming from a non-finance background, I struggled for quite a while with imposter syndrome, which can still manifest occasionally; however, over the years I have learnt that most people are willing to share their advice and experiences to help you grow professionally.

Kristiina

Finance Analyst

It has been challenging as I was unable to fully commit to a career in media finance whilst raising my two children. Since then, it has been all about working hard and finding the right balance between my professional and personal life.

Christelle

Investment Director

Professionally, the culture in Finance has changed a lot in the last few years with a better gender balance and more flexibility by hybrid working. That has created an improved culture in Finance as it is not dominated by a particular view. Personally, I can achieve a better balance between family and professional aspirations.

Wensde

Head of Legal, Real Estate

Share with us a woman who inspires you most or a quote that inspires you most.

My mother. She’s juggled working, being a wife and a mother at a young age. It’s been hard, especially when we were young. Having to return to work full-time after 6 months of maternity leave and trusting a stranger to look after her kids. It was a challenge, in her words, ‘I just did it. I had no choice.’ Her continuous strength and love inspires me every day!

Davinya

HR Business Partner

There are countless women that I draw inspiration from in various capacities, from professional successes to their social impact and personal qualities. I greatly admire Malala Yousafzai for fighting for women’s rights to education and being so steadfast in her convictions in the face of significant personal danger. As cliched as it sounds, I also draw inspiration from my Mum for the consistent work she has put in every day into raising her family whilst maintaining her career. One quote that I feel aligns closely with what I believe in is from another brilliant woman, Michelle Obama: “Success isn’t about how much money you make; it’s about the difference you make in people’s lives.

Kristiina

Finance Analyst

“Strong women don’t have ‘attitudes’, we have standards”. Marylyn Monroe.

Christelle

Investment Director

Barbara Hepworth. One of the most influential sculptors of the mid-20th Century and she had triplets in 1934! I walk past her Winged Figure on the John Lewis building on Oxford Street each day I come to our London office. The scale and beauty of its form, created by her, inspires me.

Wensde

Head of Legal, Real Estate

London, UK – Ingenious today announces that Ingenious Real Estate has closed a new 27-month £18.9m development funding facility with housing developers, Eutopia Homes, with joint venture partner Housing Growth Partnership (HGP). Eutopia Homes has signed a building contract with Living Heritage, the contracting arm of the Gr8Space group, illustrative of the firm’s commitment to delivering quality new housing in Exeter.

The project aims to bring 92 residential units to the market, contributing to the city’s active housing market and enriching the choice and standard of living for its residents. With enabling works already underway, the primary construction phase is scheduled to commence in March 2024, aiming for completion by late 2025.

We are delighted to be working with Eutopia Homes on their exciting Isca Gardens project in Exeter. In providing debt funding, we are excited to see the journey towards the delivery of 92 high-quality, efficient, and affordable homes.  We continue to see growth and performance in the developments we support. Our team is continuing to expand in both size and expertise and we remain confident and committed to supporting the UK residential real estate sector and providing flexible funding solutions to great projects and great teams.

An integral aspect of this development is incorporating 18 ‘Affordable Private Rental’ units tailored for the city’s key workers. This innovative initiative not only addresses the acute housing demand among essential personnel but also represents a pioneering venture for Exeter. Distinguished by its sustainable ethos, the development will showcase a car club, electric charging points, and substantial cycling infrastructure. Moreover, the project includes financial contributions to support the establishment of a new cycle highway, reinforcing Eutopia Homes’ commitment to fostering sustainable communities.

Tom Brown

Managing Director at Ingenious Group

We are delighted to close the funding and award the construction contract for our second Exeter scheme. This purpose-built rental product, designed with residents’ interests in mind, aligns perfectly with our vision. Our inclusion of affordable market rental units for key workers underscores our commitment to addressing pressing needs in the city.

Scott Hammond

CEO at Eutopia Homes

Employing modern construction methodologies, Eutopia Homes will collaborate closely with Living Heritage to reduce waste and streamline delivery efficiency. The implementation of lightweight gauge steel (LGS) combined with off-site production will significantly enhance the project’s Environmental, Social, and Governance (ESG) performance while minimising its ecological footprint. The development will also integrate solar panels on the roof and air source heat pumps, promoting cleaner and greener living for future residents.

We are thrilled to reach this milestone with Eutopia Homes. This project will bring much-needed new rental stock to Exeter, transforming the Exmouth Junction area. Our support for this high-quality and sustainable development resonates with Exeter City Council’s ambition to achieve net-zero emissions by 2030.

John McKeon

Investment Director at HGP

The Ingenious Real Estate team has extensive experience providing senior debt and capital to experienced mid-market developers in the residential, commercial and mixed-use sectors partnering with a range of commercial relationships built up over many years.

ENDS

Notes to Editors

For more information, please contact:

Jamie Brownlee / Thomas Lodge / Gabriela Sarosiek

Greentarget (for Ingenious)

+44 20 3963 1889

ingenious@greentarget.co.uk

This document is a press release for information only and is not to be distributed to retail clients. Ingenious is a trading name of Ingenious Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority under Firm’s Reference Number 562563.

Registered Address:  Parcels Building, 14 Bird St, London, W1U 1BU, United Kingdom.

As interest rate increases continue to bite and the costs and challenges of property development, especially in London, remain high, we expect to see a continuation of the market trends we have seen in 2023 going into the New Year. It’s reassuring to note that as we enter 2024, there is a noticeably more stable outlook for inflation compared to what we were faced with at the beginning of 2023.

Buy-to-let market

Whilst buy-to-let (BTL) investors are benefitting from double-digit increases in rents across the UK, the costs to many private landlords from higher interest rates and the increased tax burden, means we expect many private investors will continue to exit the market, which will further reduce the supply of rental stock. Looking forward, the landscape of the UK residential rental market continues to shift towards purpose-built accommodation owned and managed by financial institutions. Large pension funds and insurance companies are taking the lead here and will increasingly dominate the larger developments with significant financing opportunities arising in the mid-market development space.

Support for first-time buyers

First-time buyers are crucial to the health of the wider market, economy and support our way of life here in the UK. This crucial cohort of potential buyers are currently faced with increasingly expensive mortgages requiring high deposits or the challenges and costs associated with renting. The government should look closely at how they can carefully intervene in this area to allow first-time buyers access to the market in a way that does not unduly inflate property prices and provides good value for taxpayers.   

Residential prices holding firm

The UK continues to face a shortage of housing infrastructure, which will continue to support property prices despite the higher costs of borrowing. Widespread predictions of a noticeable decline in residential prices linked to higher borrowing rates seem to have been overstated. Indeed, there are noticeable factors that are applying the break to price falls. With residential rents experiencing a year-on-year increase of approximately 12%, there is both opportunity and liquidity within the Build to Rent, Private Rented (PRS), Purpose-Built Student Accommodation (PBSA), and Co-Living spaces. We are firmly focused on serving the needs of developers operating in those sectors alongside those operating in the Build to Sell market.

Impact of a potential change of government

Housing remains a fundamental political issue here in the UK and ranks highly on the list of concerns for voters up and down the country. As such, it is imperative for every political party, regardless of its affiliation, to include comprehensive policies addressing the core issues of supply and affordability in their manifesto commitments. We don’t expect to see a significantly different approach should a change of national government take place during 2024. Many of the issues on the ground relate to local planning policies and decisions, which continues to be a big challenge for developers to navigate. The position on the ground locally seems unlikely to be radically altered by a change in national politics.     

Market outlook

The New Year will bring with it a new and exciting set of challenges and opportunities for growth and progression in what we do. We are looking forward to continuing to work with borrowers and investors and delivering for them. The dynamic landscape of the markets that we serve and the wider economy requires us to evolve to stay relevant in addressing diverse challenges, including the climate crisis and changes in the way we are all living. 2024 will see Ingenious broaden the reach of our widely embraced development lending product. This expansion aims to offer extended terms for stabilisation to specialised developers within the rental sectors. Additionally, special lending terms will be introduced for developers with a specific focus on minimising embedded carbon in their construction practices.

We’re delighted that five Ingenious-backed films have been nominated for the National Film Awards. These nominations honour creative vision, attention to detail and commitment to storytelling. Congratulations to all the nominees.

You can register your profile and vote here.

Best Actress 2023
Jennifer Saunders (Allelujah)
Emma Mackey (Emily) 

Best Actor 2023  
Rory Kinnear (Bank of Dave)

Best  Supporting Actor 2023
Paul Kaye (Bank of Dave)

Best Supporting Actress 2023  sponsored by Youth & Earth
Phoebe Dynevor (Bank of Dave)

Best Thriller 2023 sponsored by Ivy Niche
Unwelcome

Best Independent Film 2023 sponsored by Telephononos
Bank of Dave

Best Screenplay 2023  
Frances O’Connor (Emily)

Outstanding Performance 2023  
Bally Gill (Allelujah)

Best Feature Film 2023 
Emily
Bank of Dave

Best Producer 2023
Iain Canning | Joanna Laurie | Emile Sherman | Christophe Spadone | Florian Zeller (The Son) 
Karl Hall | Neil Jones | Piers Tempest | Matt Williams (Bank of Dave)

With the implementation date for Consumer Duty fast approaching, we consider below how Business Relief (BR)-qualifying services may be impacted by the new regulatory framework.

What does the new Consumer Principle “Must act to deliver good outcomes for retail customers” mean when applied to BR?

Traditionally, financial plans are considered through the lens of agreeing an objective at the outset. In the BR world, most customers approach the investment seeking a clear objective: mitigation of the impact of Inheritance Tax (IHT) on their investment upon death. If a client sets out this objective, failing to mitigate the effects of IHT on death would mean, at least in part, failing to achieve a good outcome.

In addition to the primary objective, the emphasis on considering the specific client’s needs means financial plans must consider the bigger picture. So what should this look like for BR clients? In addition to considering investor risk tolerance and the general suitability of an investment, this could be summarised in the following way:

  • Mitigate the impact of Inheritance Tax whenever death occurs.
  • Protect and carefully grow wealth over the long term so the best possible legacy can be passed on to beneficiaries.
  • Ensure fees and charges are reasonable while maximising the utility of the service to deliver fair value
  • Offer flexibility, for instance, a facility for regular withdrawals or complete withdrawal if necessary.
  • Consider any further specific needs of each client. They might be vulnerable and require particular assistance, or they could benefit from a care planning service.

This approach raises the bar for manufacturers, financial advisers and research firms and might require advisers to consider different solutions to those previously advised.

Proactively avoid foreseeable harm

As with any investment, inherent risks are associated with an investment in a BR-qualifying service. The Consumer Duty guidance puts further emphasis on the importance of proactively avoiding foreseeable harm to an investor and assessing the limitations of an investment.

An inherently unpredictable risk for BR customers is that of an investor dying before IHT mitigation is achieved (BR investments must be held for two years before they qualify for IHT relief). Many investors considering BR investments are older, and with this, the risk of dying within the qualifying period becomes higher. It is an obligation for all parties, including investment managers, financial advisers and research firms to consider how this foreseeable harm could potentially negatively impact a financial plan, resulting in a poor investor outcome. The question then arises as to what can be done to protect the client against this eventuality. A possible solution is to consider insurance that covers the IHT liability for the first two years of the investment before it qualifies for BR. However, this would need to be weighed up with the impact of potentially higher charges, looking to find an option that protects growth while keeping costs and charges at a reasonable level, ensuring the best possible outcome for the investor. This is explored further in the next section.

Deliver fair value

Thinking about fair value of BR-qualifying services, how comprehensively is the best possible outcome met, relative to the cost, and how can this be evidenced? In the case of the outcome specified earlier, the checklist could include the following:

  • Effectiveness, including timing, of IHT mitigation
  • Investment return over the long term, after fees
  • Flexibility of access to the investment
  • Extra services for the investor, for instance, a care planning service
  • Availability of information to enable the investor to understand the investment fully

If a service provides a better return for investors than other services with comparable investment strategies, this is a reasonable indicator of whether the service is of fair value.

The same method can be used to assess the insurance value mentioned above. This might be prohibitively expensive, thus eroding the value of assets to the point that it is not worth it for an investor to gain the desired IHT mitigation before the two-year qualifying period. However, if that cost is kept to a minimum or even included at no additional cost to the investor, offering immediate IHT mitigation, then this becomes a key consideration in assessing the fair value of a service.