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Growth Opportunities in the Architecture & Planning Industry

Like most sectors, the pandemic has had a big impact on the architecture and planning industry in the UK with remote working, the suspension of in-person meetings and site visits, timelines extended, budgets slashed, and projects cancelled.

As a result, many firms have been forced to adapt, downsize or close completely. 

So, what’s the current landscape?

Well, the British economy is entering a recession, with the IMF predicting the UK economy to contract 0.6% in 2023 as rising interest rates and higher taxes make an impact. 

The UK Architectural Activities industry is forecasted to generate £8.4 billion in 2023 driven by the resident construction industry, but broadly speaking is still expected to shrink by -3.6%. 

Looking challenging. 

The private housing sector remains ‘optimistic’, that is despite a lower supply of homes due to lower housing demand. 

Construction Products Association, Director, Noble Francis commented recently that  “Over the next 12 months, the rapidly rising cost of living, the slowdown in economic growth, and fall in consumer confidence and spending will undoubtedly impact private construction investment going forward.”

Add to this concerns over mortgage availability, the end of Help to Buy, increased labour and material costs and renewed building regulations and carbon emission targets… and it’s a bleak outlook on paper.

But is that the reality?

Architects - SME Capital

Challenges feed Opportunities

There is of course short-term market challenges impacting the demand for building planning and design, with the squeeze on costs effecting budgets and general outlooks. 

But despite these challenges, there are huge opportunities for SMEs in the architecture and planning industries to grow and play a pivotal role in their development.

The UK has been a leader in developing low-carbon buildings, with various initiatives to reduce energy usage and carbon emissions. These include the Code for Sustainable Homes, the Passivhaus standard, and the Zero Carbon Homes standard.

The country has seen an increase in the construction of high-density housing projects and affordable housing to reduce urban sprawl. There is also more focus on the development of “smart cities”. 

As technology evolves, the digital tech has improved urban planning, transport, energy, and other services. Emphasis has been on creating more sustainable cities. 

There has been an increased focus on green infrastructure and integrating green spaces into urban design. The UK has seen an increase in the use of urban regeneration projects to revitalise inner cities and disadvantaged areas. 

Businesses still demand commercial buildings in the long run and an ever-growing population requires housing and maintains a desire to own property. 

Long-term, growth opportunities for businesses look positive. 

To continue to grow, funding is very important and can play a critical role in supporting business growth plans in this important sector.

Government grants were a good source of funding for businesses during the Pandemic, however, they are now far more difficult to obtain and have strict eligibility requirements.

An easier route to that funding growth is Debt Capital.  

The role of funding

Taking on debt capital can help SMEs finance growth strategies that take advantage of the opportunities in the sector. 

With the right debt capital injection, businesses can scale-up and get growth-ready. 

Debt finance can cover the costs of buying equipment, investing in technology, hiring more staff and/or acquiring businesses that fit into your broader portfolio strategy to expand your operations. 

Historically provided by banks or other financial institutions, but more recently provided by alternative lenders like SME Capital, a lender provides the capital needed for a company to grow and succeed in return for an agreed loan, repaid with interest.

If you are looking for funding opportunities to help, take your business from the ground floor to the penthouse, and would like to discuss how we can help fund your growth plans, please feel free to get in touch with us at SME Capital.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods. We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK.

By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions

February 2023

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