Understanding the Challenges of the U.K. Real Estate Industry

A home that has a for sale sign

The U.K., real estate industry has recently faced several problems, ranging from a lack of housing stock to Brexit-related uncertainty. This article will explore some of the challenges the U.K. real estate industry faces and how business owners and entrepreneurs can respond to these issues to remain competitive in an ever-changing market.

Housing Shortage

The U.K.’s population growth over recent decades has outpaced the number of homes being built, resulting in a nationwide housing shortage that has driven up rental costs and made it difficult for many people to find affordable housing. This problem is compounded by the fact that many potential building sites are subject to restrictive planning regulations—meaning they cannot be developed without significant effort and expense on behalf of the developer—or are too expensive for developers to acquire at their current market value. As a result, there is a chronic undersupply of quality housing throughout much of the U.K., which has driven up property prices and rents and made it difficult for many people to find suitable accommodation.

That’s why landlords are now essential in the U.K. more than ever. Landlords can help fill the housing gap by providing rental properties—either in existing or new developments—that are affordable and well-suited to their tenants’ needs. In addition, working with a reputable property management company can help landlords effectively manage their portfolios and ensure that they comply with local and national regulations governing the industry.

Brexit Uncertainty

The uncertainty surrounding Brexit has had a noticeable impact on the U.K.’s real estate market, as potential buyers have become more cautious due to fears over possible changes in trade agreements, immigration rules, taxes, and other policies that could affect their ability to purchase or rent property in the future. This uncertainty has left many buyers waiting on the sidelines until there is greater clarity about what will happen after Brexit is finalized before committing to any purchases or investments in the U.K.’s real estate market—which has had a dampening effect on sales volumes throughout much of 2019 and 2020 so far.

Real estate businesses need to take three steps to ensure that they are not fully affected by this economic uncertainty. Here they are:


It’s good to have a contingency plan in case things go wrong. Accidents and other unforeseen events can affect the value of real estate investments, so it’s a good idea to invest in policies that will protect your assets against loss or damage in the event of such an incident.


Investing in marketing campaigns and tactics—both online and offline—can help you reach a wider audience of potential buyers and investors. This can help you maintain sales volumes even in the face of economic uncertainty. It will allow you to showcase your properties and services to more people who may be interested in your offerings.

Strategic Partnerships

Finally, building strategic partnerships with other businesses could help your real estate business weather any economic storms. For example, joining forces with other local real estate businesses could help you share costs and reach a broader market of potential buyers and investors who may otherwise be hard to get.

A worker drilling something

Shortage of Construction Workers

The U.K.’s real estate industry is also facing a shortage of skilled construction workers, making it difficult for many businesses to source qualified professionals who can undertake the necessary work to develop and expand their portfolios. This skills gap has been driven by several factors, including low wages in the sector, diminishing numbers of young people pursuing careers in construction, and the rising cost of training.

To address this, businesses and workers need to do some robust testing. If you’re a construction worker or firm, booking your CITB test is crucial. The test is integral to maintaining a high standard of work across the U.K., as it ensures that workers have the necessary skills, knowledge, and competencies to succeed in their roles. If you are a business owner, partnering with local training providers or investing in your internal training programs can help attract and retain skilled construction workers.

Tax Changes

The British government recently announced plans to introduce new tax measures aimed at addressing concerns over affordability in certain parts of the country by increasing Stamp Duty Land Tax (SDLT) on second homes and additional properties purchased by corporate entities such as companies or trusts, while also reducing SDLT for first-time buyers buying properties costing up to £500k (a discount worth up to £5k). These changes are intended to stimulate activity within certain parts of the market and discourage investors from purchasing multiple properties without intending them for residential use—which could help address some of the supply/demand imbalance within some regions of Britain’s housing market now.

Overall, it is clear that there are several challenges currently facing businesses operating within Britain’s real estate industry. However, with careful planning and strategic decision-making based on robust data analysis, companies can remain competitive even amidst these challenging times — allowing them to survive and thrive going forward into 2021 and beyond!

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