What is the industry expecting from 2025?

Place North West asked professionals from all corners of the industry what they are most looking forward to in 2025 and what they expect to bring the biggest challenges.

Quotes have been edited to ensure brevity and clarity.

James Whittaker, managing director, Peel Waters

I expect ‘delivery, delivery, delivery!’ The government has set ambitious housing targets and Peel Waters is ready to play its part in reaching it.  We are in a position where we have outline planning permissions in place on land ready for large-scale development in Liverpool, Manchester, Trafford, and Wirral, so we are ready to partner up with other progressive and forward-thinking developers to work together and get delivering. 2025 will also see even more new leisure concepts coming to TraffordCity and more logistics space being unlocked and built.

However, there is still the challenge of the general economic and political backdrop, if interest rates remain high they will stall investment and new developments.

Angela Mansell, managing director, Mansell Building Solutions

The North West is one of the fastest-growing economies in Europe. The government’s goal for 1.5m homes will translate into mid-rise developments of apartments in town centres that Mansell, as modern methods of construction specialists, is perfectly placed to help main contractors and clients deliver with certainty and punctuality.

Our concerns are about the continuing double impact of changing legislation and not having enough people to deliver schemes. The impact of the Building Safety Act and how that affects pipelines and work for 2025, plus labour shortages and how that affects the delivery of projects. Our challenge is getting enough clients and contractors to understand the possibility of MMC and engaging earlier with a specialist like Mansell to help mitigate some of these issues.

David Lynch, director of development, Manchester City Council

We have steady economic foundations we can build on. In retrospect last year felt like the trough, and while we’ve all been caught out by being overly optimistic, Manchester is well placed to pick up investment demand now interest rates are steady and inflation stabilises.

The worry is demand for quality housing and offices outstripping supply, and the subsequent economic consequences if we miss out.

Dan Burn, head of development North West and Yorkshire, Panattoni

Heading into 2025, businesses will continue to focus on mitigating risks caused by global disruptions, driving an increase in nearshoring across both the logistics and manufacturing sectors. Whilst overall availability has increased over the past 12 months, there remains a noticeable lack of supply for “Big Box” units of 400,000+ sq ft in strategic locations across the country, including in the North West and Yorkshire. Panattoni has been proactive in addressing this need to not only meet immediate demand but also position us strongly for growth in 2025.

Over the last couple of years, the occupational market has transitioned from one of growth and expansion to one of reorganisation and restructure. There is less urgency to conclude deals as decisions have become more strategic in nature. Some of the changes implemented in the Budget, coupled with interest rates remaining higher for longer, have prolonged the decision-making process and I expect this to continue in 2025 to the frustration of developers, investors, and agents.

Anna Relph, director, Turley

I expect that 2025 will be the year of the local plan, promoted by planning reform. This will be felt particularly in the North West where we have had a relative dry spell in local plan activity in recent years. Areas to watch in 2025 include both Cheshire authorities, Stockport, West Lancashire and the nine Places for Everyone authorities. The local plan process will provide opportunities to promote the benefits of a coordinated approach to growth, including infrastructure provision and place-making.

On the other hand, resourcing pressures within the public sector will present an ongoing challenge to the efficiency and effectiveness of the planning system and are likely to worsen as the volume of applications increases in response to the government’s reforms. I expect longer timescales for consultee responses and for applications to be determined. Public-private collaboration will be key to progress.

Will Lewis, director, OBI

We’re looking forward to seeing the completion of the region’s best-in-class new-build offices in 2025, which will set a new benchmark for quality and represents that the environmental, social, and governance agenda has evolved building design and how they operate.

However, we need to work harder as an industry to hit agreed timescales and accelerate the speed of transactions, not letting things drift unnecessarily for months – even some letting transactions are now taking up to 12 months to close from the date terms are agreed.

Barry Crichton, managing director for Manchester, Avison Young

We expect 2025 to bring a period of greater political stability and for the government to begin to make good on promises on investment in infrastructure and green commitments. The UK still faces a significant challenge to meet the 2050 decarbonisation target as energy demand continues to grow. We welcome the new government plans to bolster green power infrastructure and improve wind and hydrogen capacity.

However, with a lack of Grade A office stock and the pattern of businesses’ flight to quality set to remain, we expect a continued undersupply in 2025. We need to see more public-private sector collaboration to help make new developments more viable to prevent our core cities from putting a ‘closed for business’ sign up. We would need to see significant rent increases though, especially if developers are to implement the kind of sustainable measures that modern occupiers are looking for.

Joe Rigby, managing director for the North, CBRE

Next year the UK market will benefit from lower interest rates, increased investment, and planning reforms. Growth in the life sciences, tech, and finance sectors will drive demand. Sustainability initiatives and AI advancements will help shape developments. Commercial real estate will see rising values and investment, particularly in prime office and logistics sectors. Data centres will expand, driven by AI needs. Retail parks will lead investment, while affordable housing and built-to-rent sectors will face supply challenges but remain attractive to investors. Lots of positives as we move forward.

The housing market faces challenges with planning reforms and supply shortages. Rising costs for business and higher interest rates could impact investment. The rental market may see affordability issues, and new energy-efficient regulations could strain landlords. Additionally, the sustainability agenda and climate risks require significant attention. We must navigate older asset repositioning costs, and the data centre market faces capacity constraints and power availability issues.

Jane Healey-Brown, director, Arup

The government’s Christmas gifts of the Devolution White Paper and the new NPPF provide both optimism and opportunity for the region. The North West has the political climate and local culture of partnership necessary to make a step-change in delivering the homes and infrastructure that are needed.

Next year, we need to make sure we can collectively rise to the challenges our industry faces. We need to create the capacity to collaborate and ensure we are bringing forward the skills, particularly to address climate change.

Dean Thompson, director and head of region (North West), HBD

The continued reduction in interest rates should hopefully lead to a recovery across the wider economy, coupled with a sharpening of yields and improved viability across several sectors.

However, it will be interesting to see whether any of the recently announced changes to the planning system succeed in speeding up the process, which remains pretty painful.

Dave Saville, North West managing director, Caddick

We are looking forward to the continued growth of the industrial and logistics market throughout the North West as demand increases around the M6/M62 corridor.

We do however expect to see labour costs rising due to an increase in housing output while we still have a limited pool of construction resources.  This will likely drive an upturn in inflation impacting viability in a tight investment.

Caroline Payne, director, Emery Planning

We are excited to be working with the new NPPF which is bold in terms of economic growth, housing delivery, and development in the Green Belt. It offers an excellent opportunity for the industry as a whole and we are excited to see how this translates in the decision-making process during 2025

The opposite side of this coin is capacity in the system. Notwithstanding the government’s promise of additional resources for the public sector, the system is already at capacity, and we are concerned that the inevitable increase in applications will place even more of a burden on our overstretched local authorities, statutory consultees, and planning inspectors.

Suzanne Benson, partner and head of real estate, Trowers & Hamlins

With the government’s focus on promoting increased delivery of homes and the clear commitment to further devolution, I am looking forward to the policy details starting to take shape during 2025 – and the response of the sector. The scale of the delivery challenge presents a real opportunity for creativity between the private and public sectors.

On the more negative side, I worry about the unintended consequences of the drive to abolish leaseholds. The tenure isn’t perfect but it is supported by lenders and underpins key parts of the market. Any wholesale change needs to be approached with caution.

Andy Roberts, director of urban design, Planit

Planit is already working on several projects that have been influenced by the government’s planning policy shift to release Grey and Green Belt sites in appropriate locations. The newly adopted NPPF and Places for Everyone will expedite these forces. In turn, I believe local authorities will increasingly reassess their urban areas and realise the potential to increase housing density around transport hubs and corridors. I also see councils moving forward with place-based strategies to secure committed and potential future funding packages.

The recent government changes are necessary, however the progressive vision for the UK must be built around sustainable growth, one that connects to nature, protects our endangered wildlife, and fosters thriving communities.

Paul Brindley, managing director, Sandyford Properties

We’re looking forward to seeing a greater number of transactions in the market. We’ve seen a substantially lower level of transactions in the multi-let industrial sector this year, and this lack of liquidity is being felt throughout the real estate market. Pent-up transaction demand, as well as further gradual cuts in interest rates, should result in the market unlocking and building some momentum next year.

On the other hand, 2025 also brings unpredictability and the potential for economic shocks to disrupt the market. International events could impact both investment and occupational demand. However, these risks could quickly fade if the government can unlock the planning system and harness the worldwide ‘sugar rush’ that could occur with a changing administration in the US.

Nick Hilton, partner, Workman LLP

Manchester continues to be a hub that attracts innovation, investment, and a culture of creativity. I’m keen to welcome a fresh cohort of graduates and apprentices into our team. Seeing them grow and thrive is always a highlight. A large part of my role is about empowering them to apply their energy and diverse ideas, which will help us stay ahead in an evolving market.

However, the prevailing climate of economic uncertainty, stemming from pressure on household incomes could dent consumer confidence and reduce discretionary spending, therefore impacting retail and leisure tenants. In offices, we are contending with the uncertainty brought about by the continued shift to hybrid working, reducing traditional office space demand.