UK Living Roundup March 2026

Last week, the Bank of England reminded us that the UK is far from immune to the global impact of the conflict in the Middle East, signalling the potential for higher inflation and, therefore, less room for interest rate cuts.

Amid a cloud of uncertainty, this raises questions for how long the expected economic recovery will take – interest rate cuts and lower inflation being two key positives we identified in our own UK 2026 Living Outlook.

But we also identified a third positive for Living – something that the UK does have more control over – namely, improvements to the Gateway 2 process. Building safety approval for higher-risk buildings (i.e. residential towers of at least 7 storeys/18 metres) has been a serious hurdle for new development since its introduction in late 2023, not helped by the fact that both the Building Safety Regulator and applicants have been effectively learning on the job, trying to understand the process and make it more efficient while applications piled up. As a result, the 12-week target for decisions was a far-off dream.

Anecdotally, things have been improving, but what does the data tell us?

One problem with working that out is that, as a relatively new government body, the Building Safety Regulator hasn’t been consistent with its data releases. Last year, the publications were sporadic and the way data was reported changed from one release to the next. New build applications were moved to a new ‘Innovation Unit’ in August with the aim of speeding up decisions through a centralised team – great, but with an added layer of complexity in the hunt for like-for-like data.

The last few monthly releases have been more consistent and, therefore, more helpful (up to a point: how invalid applications were categorised changed in the latest report, arguably for the better, but unhelpfully for working out improvements over time). So, we now know that in the 12 weeks to the end of February for new build applications:

• Approvals took an average of 18 weeks – up from 13 weeks in the 12 weeks to the end of January (as a result of a few longer standing applications being cleared), but down considerably from 36 weeks between January-March 2025
• London approvals averaged 12 weeks, meeting the target
• The approval rate was 33% (vs 30% in January), excluding invalid applications
• Rejections were faster at 11 weeks (vs 23 weeks last year)
• Some 10,514 homes were approved in the most recent 12-week period (a success rate of 45% by units), with a further 31,191 in live cases – down from 37,773 at the end of December
• The backlog of legacy (pre-Innovation Unit) cases has nearly been cleared. With three cases remaining, down from 91 at the start of October, the BSR has made real headway here – although it had aimed to clear the backlog by the end of 2025
• The number of decisions (108) is higher than the number of new applications (82)
   

This all implies there have been tangible improvements from one year ago. The Innovation Unit appears to be doing its job of streamlining decision-making, although it isn’t yet hitting its 12-week target. The number of live cases is still rising (123 vs 89 in December), but it’s approaching what the BSR expects to be its ‘steady-state caseload’, and, with the end of the legacy backlog, resources will be focused on new schemes.

The real problem is the number of invalid applications. More than half (56%) of applications in the 12 weeks to January failed basic checks on required documents – and that rate has not moved meaningfully since. At the time, the BSR said: “Whilst we continue to point applicants towards the CLC [Construction Leadership Council] guidance developed with support from BSR, we are actively looking at how we can further support applicants as they prepare their applications.”

Still, progress is progress. The question will now start shifting to how smooth Gateway 3 – the final step for tall residential towers – is. And, when it comes to data on that, we are still very much in the dark.

Sometimes it’s good to take a step back and put the UK into wider context. As we saw in 2023, UK Living proved to be resilient, despite a slowdown in the investment market. That became particularly clear when looking at activity in other sectors or other countries. 

The latest report from our EMEA Living research colleagues – EMEA Living Market Perspectives 2026 – helps recontextualise 2025 in a similar way, and it finds that the UK accounted for a record 37% of European Living investment last year.

It compares last year’s investment to both the year before and a historical peak in 2017-21. With the UK up 47% annually and 70% against historical levels, it is firmly in the ‘high growth’ category, as seen in the chart below. Only Switzerland, rising 89% against the 2017-21 peak, is higher, and both markets have bucked a trend that has seen more than half of countries remain below historic levels.

As this newsletter has previously explored, much of that boost last year came from a handful of mega healthcare deals in Q4, which partly disguises the fact that growth in other sectors was more muted. The report shows that PBSA investment was up 11% in the UK, compared to 65% in continental Europe as investors turn to less established markets.

However, the UK was not alone in benefitting from bigger transactions. Investment in deals over €500m more than doubled last year, and the team expects platform deals – including in the UK – along with mature core markets to fuel volumes as certainty improves this year. The report forecasts total volumes of €70bn across EMEA, a ‘stable’ 13% rise year-on-year.

Of course, ‘certainty’ is the operative word here, and as we’ve seen in the last few weeks as the conflict in the Middle East has unfolded, the path towards greater certainty can be unpredictable.