Nearly 60% of high net worth (HNW) investors intend to significantly ramp up their real estate investments over the next year, according to a study by ASK Partners.

A notable 18% of these affluent investors are prepared to increase their tolerance for real estate investment risk, whereas 17% plan to scale it back.

Looking ahead, HNW investors identify the primary challenges for the real estate market over the coming year as escalating interest rates, shifts in political leadership, heightened regulations, and potential tax system modifications.

Moreover, 13% of investors believe housing should be the foremost priority for an incoming government.

Investors have outlined three key areas for governmental focus to stimulate real estate investment in the UK: easing restrictions on property conversions and brownfield site development, revising zoning and land use policies, and creating incentives for affordable housing initiatives.

Daniel Austin, CEO and co-founder of ASK Partners, emphasized, “Our research shows that investors plan to significantly boost their real estate investments in the next 12 months which is a really positive sign for capital investing in the sector and shows the strength of real estate debt as an asset class.

“The positive sentiment towards the life sciences, warehouses & logistics, and co-living sectors, is certainly a reflection on the investment prospects we are anticipating due to market demand.

“However, higher interest rates, political changes, increased regulation, and tax adjustments are seen as key challenges.

“To enhance investment, investors want to see the government focus on alleviating restrictions on conversions and brownfield sites, revising zoning and land use policies, and incentivising affordable housing.”

He continued, “Addressing these issues could help overcome planning restrictions, affordability challenges, and the shortage of a construction workforce, thus strengthening the UK’s real estate market.

“Housing is a pivotal election issue, linked to economic stability. Rising house prices and mortgage approvals suggest the beginnings of a recovery, but the housing shortage threatens a full turnaround.

“The UK faces an affordability crisis due to insufficient rental and sale properties, impacting GDP. Decades of social strain persist unresolved.

“Parties must present credible long-term plans, aiming for 300,000 homes annually, a target unmet since 2004.

“Reviving SME housebuilders, boosting skilled labour, and reforming planning are crucial.”