QX Rental Living Insights Evening 2025: Challenges and Opportunities Shaping the Future of Living

At the QX Rental Living Insights Evening in London on 29th October, leaders explored how rising costs, shifting capital dynamics and technology are changing the outlook for rental living. The discussion centred on three priorities for the sector: viability, clarity and operational agility. 

Chaired by Philip Hillman, the panel included Freddie Wonnacott (M&G Real Estate), Justin Harley (Yardi), Michael Keaveney (Grainger plc), Sowgol Zarinchang (Way of Life), Simon Scott (JLL) and Alexandra Notay (Radix Big Tent Housing Commission). 

Together, they unpacked the market realities shaping investment and delivery: from the pressure on development viability to the growing role of data and automation in protecting margins. 

When viability becomes the gatekeeper 

Across the living sectors, one word now frames every discussion: viability. The maths on many schemes simply no longer works. Layered headwinds (from stamp duty changes and the loss of multiple dwellings relief to landfill and remediation costs) have tightened margins to the point where even permitted developments struggle to move forward. 

At the same time, developers face rising sales risk in for-sale models. The concern is no longer demand but absorption: how quickly can stock move, and at what cost of capital? The result is a market where some stabilised assets are trading below replacement cost, underscoring how difficult it has become to justify new starts. 

Capital discipline and the cost of money 

Behind every viability challenge sits the cost of money. Government bond yields near five per cent have compressed the spread to real-estate income yields, which hover around four to four and a half. Investors can now achieve similar returns from low-risk assets, forcing residential strategies to prove both income strength and long-term growth. 

Core capital has been scarce. Value-add and core-plus investors remain more active, but the market still feels selective. As discussions highlighted, a deeper understanding of risk and fundamentals is essential, both for those deploying capital and for those making the case to them. The living sector’s appeal remains grounded in long-term demand, but the numbers must align with today’s cost of debt, not yesterday’s optimism. 

Protecting NOI through data and automation 

If capital sets the outer limit, operations determine what’s left within it. With staffing often representing six to eight per cent of operating budgets, efficiency is now an operational necessity rather than a cost-cutting exercise. Teams are being asked to “do more with less,” and technology is increasingly part of that equation. 

Automation is beginning to touch core finance processes once deemed too manual, from month-end closes to reconciliations. On the front line, digital tools can absorb much of the out-of-hours workload, with a majority of tenant or resident queries arriving when offices are shut. The message was clear: automation only pays off when data is clean and structured. Building a coherent data strategy is therefore the prerequisite, not the afterthought, for any meaningful AI adoption. 

Building at scale means fixing capacity 

Even the most advanced operating model cannot offset physical capacity constraints. Only a small fraction of the UK’s construction workforce is focused on the living sectors, limiting how much can be delivered each year. Modular and offsite construction offer hope, but they require predictable pipelines to justify investment. Without sustained volume, manufacturers cannot scale or bring down costs. 

Pragmatic, partial adoption is already improving quality — from pre-built bathroom pods to precision-made panels that cut snagging and accelerate completion. Yet real progress depends on continuity: consistent planning, steady financing, and a flow of projects large enough to keep factories running between cycles. 

Clarity, consistency and confidence in planning 

Policy stability remains the missing link. For years, the planning system has lacked the three Cs the sector repeatedly asks for: certainty, clarity and confidence. The upcoming Planning and Infrastructure Bill may begin to address this by restoring strategic planning through regional spatial frameworks, while devolution could give local authorities more power to decide and act faster. 

The immediate ask, however, is simpler: stop the churn. Fewer abrupt policy shifts and clearer guidance would save investors and developers both time and capital. Practical changes, such as removing VAT on refurbishment and aligning safety standards across tenures, could have an outsized impact on delivery. 

Momentum amid uncertainty 

Despite the headwinds, demand for quality rental homes remains robust. Well-located assets continue to let quickly, reinforcing the structural imbalance between supply and demand. Alongside new build, retrofitting and upgrading existing stock have emerged as viable routes to growth, aligning with both ESG and operational priorities. 

Institutional capital is also adapting. Local government pension schemes have increased allocations to housing, signalling confidence in the sector’s long-term income profile. Combined with private capital seeking stable returns, this points to a more diversified investor base than in previous cycles. 

Conclusion: Turning Clarity into Momentum 

Beyond numbers and regulations lies a simple truth: the living sector’s future depends on how well it communicates its wider purpose. The focus must shift from reacting to short-term hurdles to building long-term trust with residents, investors and policymakers alike. 

Real resilience will come from consistency — sound data, efficient operations and steady delivery. As clarity returns to planning and capital markets, the organisations that strengthen these foundations now will be the first to turn renewed confidence into meaningful growth. 

Originally published Nov 10, 2025 11:11:05, updated Nov 10 2025

Topics: Announcements