The freedom to build: What are the available options when it comes to tackling barriers to development within the UK market? Richard Taylor, Partner and Head of Building Consultancy at Workman, writes for Institutional Real Estate Inc.
The UK government’s Modern Industrial Strategy, announced on 23 June, represents a significant shift toward addressing the barriers that have long plagued the country’s commercial real estate development.
With its 10-year plan to “make it quicker and easier for businesses to invest”, the strategy directly tackles some of the most pressing challenges facing developers today, with promises to reduce grid connection times; streamline planning processes; cut electricity costs; and provide an extra £1.2 billion (€1.4 billion) each year for skills until 2028-2029.
While the government’s commitment to “get Britain building” is welcome, commercial real estate development projects continue to face an increasingly complex landscape influenced by regulatory, economic, and political factors. Development challenges in 2025 remain many and varied, with some with investors pushing specification expectations to futureproof assets against further hikes in building safety and ESG requirements.
Five obstacles remain prominent: planning, power supply, insurance, the building safety regime, and skills shortages. The source of these obstacles varies, as does the severity of their individual impacts, but they have collectively led to significant delays to the United Kingdom’s growth output.
Planning: Reforms announced, but implementation remains challenging
The strategy commits to reducing planning timelines and costs through hiring more planners, streamlining pre-application requirements, and combining environmental obligations. The Planning and Infrastructure Bill aims to support planning decisions on more than 150 major projects this Parliament.
However, we are aware that local planning authorities (LPAs) remain significantly under-resourced, creating backlogs and extended consultation periods that increase project costs and reduce development viability. Implementation of reforms will take time to reach local level. Smart project management, therefore, remains essential. Early engagement with communities and LPAs helps resolve concerns before they cause delays. Coordinating highways reports, ecological surveys, and acoustic testing prevents costly setbacks — a missed ecology survey can trigger four-month delays. Proactive planning remains critical during the transitional period.
Power supply: Significant reforms promised for grid connections
The UK government and The Department for Energy and Net Zero’s (DESNZ) strategy addresses grid connection delays as a primary barrier, promising to cut waiting times by up to seven years. The “first come, first served” system will be replaced with “first ready, first connected” prioritisation. Despite these commitments, immediate challenges persist. Industrial development, AI infrastructure demands and renewable energy (PV) reverse loading have intensified grid pressure.
Offsite reinforcement is often the rule rather than the exception with distribution network operators advising of connection periods of more than a year for average developments to as much as 10 year to 15 year-delays for data centre applications in certain locations.
Developers must work proactively while awaiting reforms. Project managers’ early collaboration with M&E consultants to assess energy density can prevent over calculation of power needs. Post-planning strategies should include alternative energy approaches, phased development models, and on-site generation to expedite connections. “Just in case” power banking is now counter-productive when applying the speed-to-value test.
Building Safety Act: Continued delays despite regulatory streamlining promises
While the Industrial Strategy promises a 25 percent reduction in regulatory administrative costs, building safety regulations remain unchanged. The strategy focuses primarily on manufacturing and energy, rather than construction compliance.
The Building Safety Act 2022 — while welcomed as a major improvement to safety standards — continues to add complexity to residential projects. More than 90 major projects await Gateway Two sign-off, with just 11 of 130 projects approved since 2023. Building Safety Regulator approval creates uncertainty around completion dates and costs.
The House of Lords enquiry into the activity of the Building Safety Regulator is welcome, as are the changes within the Regulator’s leadership, but these things will take time to have any practical benefit. Early engagement with building safety specialists is essential for navigating requirements including Principal Accountable Person roles, golden thread documentation, and mandatory reporting.
Success requires integrating building safety considerations into investor strategy from inception, in order to minimise risk, save time and avoid legal disputes. Opportunities to design out risk early should be identified and implemented.
Insurance: Climate risks drive costs higher
While the UK government’s strategy does not specifically address insurance costs or building insurance challenges, climate risks including flooding and wildfires drive premium increases, while stricter safety regulations create additional legal liabilities.
Projects in high-risk areas struggle to secure adequate coverage, affecting project financing. Professional indemnity insurance costs rise for design professionals, with cladding and fire safety exclusions delaying specialist recruitment.
Developers must adopt climate-resilient design strategies from project conception, incorporating flood resilience, fire safety enhancements, and sustainable materials that insurers recognise as lower risk. Early engagement with specialists such as fire safety experts during design phases helps optimise coverage and minimise premiums.
Skills: Strategy investment falls short of construction needs
The funding the Industrial Strategy allocates annually for skills development does not include construction among its eight priority growth sectors, potentially limiting targeted support.
Construction faces a critical shortage of 300,000 workers compared to 2019 levels, particularly in the experienced 50-plus demographic. Government reviews warn of “unprecedented risk” from declining workforce size, with current deficits of approximately 40,000 workers directly impacting project delivery.
The government’s plans to target one million young people not in education, employment or training, combined with more flexible foundation apprenticeships, offer some relief. Developers should engage proactively with training providers and consider in-house apprenticeship programmes to secure talent pipelines. Supply chain vetting should be vertical and horizontal. Subcontractors are responsible for 95 percent of development delivery and their talent programmes, recruitment, and training strategies should form a key part of the selection criteria.
Capitalising on the Industrial Strategy opportunity
While these five challenges remain daunting, the UK government’s Modern Industrial Strategy represents the most comprehensive attempt in years to address systemic barriers to development.
The strategy’s focus on removing barriers, providing long-term certainty, and creating a pro-business environment offers genuine cause for optimism. However, successful navigation of this transitional period requires developers to remain proactive rather than simply waiting for reforms to take effect. The most successful projects will be those that combine intelligent project management with strategic positioning to benefit from emerging opportunities.
These challenges also present opportunities for modernisation and sustainability in the built environment. Addressing each one requires a collaborative approach between government, investors, developers, and wider industry stakeholders.
With the Industrial Strategy providing a framework for improvement and additional funding for strategic sectors, the built environment has the potential to deliver the growth on which our economy depends — but only if real estate owners and developers adapt quickly to the changing landscape and position themselves strategically for the opportunities ahead.
By Richard Taylor, Partner and Head of Building Consultancy
This article originally appeared in Institutional Real Estate Inc.
