1 December, 2025

Unlocking Urban Potential: The Next Phase of UK RegenerationExecutive Summary

Jon Neale
Head of Research & InsightView profile

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Britain’s cities have undergone a remarkable reinvention over recent decades. Once characterised by derelict Victoriana or post-war concrete, many urban centres have been reshaped through large-scale transformative projects, this report’s definition of regeneration.

Heritage buildings have been repurposed; new quarters provided with high-quality public space, anchored by cultural institutions; and city living has become mainstream. These efforts have helped turn such locations into vibrant destinations that attract investment.

But this transformation is uneven and fragile. Gleaming new buildings sit cheek-by-jowl with obsolescent, empty buildings and deprived enclaves, while local authority budgets are under extreme pressure.

Cities and towns have ambitious plans to continue to address these problems. But since the pandemic, rising construction and debt costs, stalled projects, and slowing demand have undermined progress. The sense is growing that Britain’s urban fabric is beginning to fray.

Nevertheless, there is optimism – and not without reason. Some projects are making progress despite the headwinds; others are creating inventive frameworks and approaches to enable it in the future. This report explores the state of regeneration across the UK – and the future of it – by drawing on:

Site visits to eight major regeneration projects – Elephant Park, Old Oak Common, Royal Albert Dock (London), Bradford, Dundee, Liverpool, Brabazon in Filton near Bristol, and Harlow.
Interviews with practitioners and stakeholders directly engaged in delivering, financing, and planning regeneration.

Together, these sources provide a grounded picture: the old regeneration models no longer work, and a new approach needs to emerge.

This report provides insight into the complex problems surrounding urban regeneration across the UK. For investors, developers, and local authorities, this is not just analysis – it’s a roadmap for action. We highlight where opportunities lie and how you can position yourself to drive the next phase of regeneration.

Based on visits to the eight ongoing projects and interviews with those involved, we aim to unlock value from those complex challenges and opportunities and offer actionable insight. While the picture is sometimes a little bleak, there are also plenty of new ideas and reasons for optimism.

Historic Models No Longer Work

Past phases of regeneration were shaped by their time. The 1980s saw bold public sector intervention through Urban Development Corporations; the 1990s and 2000s leaned heavily on private investment during years of growth; the 2010s were defined by austerity, competitive bidding pots, and a patchwork of “levelling up” programmes focused on “left behind” towns.

These models are now exhausted. The combination of elevated costs, tighter regulation, weaker public capacity, and more cautious private capital means the formulas that once delivered Canary Wharf or Manchester’s renaissance are no longer fit for purpose. A ‘fourth phase’ of regeneration, with a different modus operandi, is starting to take shape.

“The public sector is going to have to move up the risk curve and take a more active role in regeneration – similar to the eighties and nineties, but more locally led.” – Local Authority Head of Regeneration

THE PROBLEMS

Rising Build Costs Build costs have risen by c.25% since 2022
Higher Debt Costs Debt costs have risen by at least four percentage points
Competitive Alternative Investments Returns from other investments have increased

REASONS FOR OPTIMISM

Office Market Recovery Despite centralisation, office markets are starting to improve
Residential Market Resilience The residential market is poised for a recovery
Emerging Investment Sources New sources of investment are emerging
Impact of Devolution Devolution and local government reorganisation could be instrumental

Five Key Themes for a New Phase of Regeneration

The landscape of regeneration is evolving, shaped by a complex interplay of economic, social and policy factors. Our research across eight locations highlights both persistent challenges and emerging opportunities, suggesting that a new phase – characterised by greater complexity and the need for deeper engagement- is underway. Against this backdrop, we explore how practitioners are adapting and how models are emerging that may define the future of regeneration in the UK. Given this, our research revealed some key themes for making regeneration work, given these constraints and shifts:

Partnership – Public and private sectors must share risk more equally, with opportunities provided by partnership models such as English Cities Fund, policies aimed at amalgamating pension funds and the continuing interest of overseas capital. This may involve a relaxation or review of s123 ‘best consideration’ rules.
Public Sector as Master Developer – Councils and combined authorities should take a stronger lead, investing early in public realm and catalysts, phasing to create value, releasing smaller lots that suit private sector requirements, and focusing limited resources on the most viable sites. In selected locations, Mayoral Development Corporations may be well-suited to this role, as the Mayoral model becomes more widespread.
Coordinated Strategies – Regeneration should be tied to housing, transport, industrial policy, and the management of public estates at a regional level. This may require more action from central government around infrastructure, supported by the new guidance around Treasury Green Book appraisals.
Capacity Building – National or regional ‘regeneration academies’ could help train new professionals and share best practice and innovative approaches, supporting local authorities who may have lost expertise during the years of cost-cutting.
Policy Reform – The government is focused on housing numbers, but some basic reforms could help urban delivery: VAT parity for refurbishment, streamlined planning and infrastructure approvals, a streamlined Gateway process, more flexibility around affordable housing and greater fiscal autonomy and new revenue for local government.

With the right choices, the sector can help to continue the progress of the past few decades. The task of improving Britain’s urban fabric is more central to its economic future than ever before.

“We are going to have to be creative in thinking about how schemes get off the ground. There isn’t a cookie-cutter model anymore; we need to think more deeply about place and function.” – Local Authority Head of Regeneration

Conclusion

The regeneration sector faces real headwinds: stalled projects, reluctant investors, limited public resources, and no overarching national vision. Yet there is energy, optimism, and innovation at the local level, and emerging – if not entirely formed – market opportunities.

A Phase Four of regeneration is beginning to emerge. It will be defined by stronger public–private partnerships, more careful phasing of projects, new anchors for mixed-use development, and a more coordinated approach across housing, transport, infrastructure and the economy.

Enabling this is not just about repairing urban fabric. It is about ensuring Britain’s towns and cities can act as the engines of national growth, and that they are at the heart of national economic policymaking.

This report draws on our expertise in unlocking value from complexity, providing clients with the insight and clarity needed to navigate a rapidly evolving regeneration landscape. The next chapter of Britain’s regeneration story will be written by those who act decisively. If you would like to understand where to focus, how to structure partnerships, and how to unlock value from complexity, our team can help. Explore the full report by clicking the link below.

Want to shape the future of regeneration? ACCESS THE RESEARCH here

*This research has been prepared for general information purposes only. It does not constitute any investment, financial or other specialised advice or recommendations, and you should not, therefore, rely on its contents for such purposes. You should seek separate professional advice if required.