The Future of Funding: Why 2025–2030 Could Redefine Regeneration in the West Midlands

2025 was a difficult year for real estate across the UK. Inflation lingered longer than anyone hoped, the cost of capital stayed comparatively high, and planning bottlenecks pushed already-tight viability margins even further. For many developers, it felt like a year spent waiting for the market to blink first.

Yet in the West Midlands, something else was happening beneath the surface, something that now looks less like a series of policy updates and more like the early signs of a structural turning point for 2025–2030.

The June Spending Review did more than allocate funding; it reframed the purpose of housing and regeneration within the UK economy for those most in need:

• £39 billion for affordable and social housing
• £3.9 billion per year, with 60% for social rent
• A commitment contributing to 1.5 million homes by 2029
• Crucially, multi-year certainty

But the real significance lies beyond the numbers. The Review signalled a shift from short-term, reactive funding cycles to long-term, viability-supportive investment. In other words, capital is now available earlier in a project’s lifecycle, where viability is most fragile and where public-sector support can make the biggest difference.

Over the next five years, the West Midlands will operate within a funding environment fundamentally different from anything it has had before. These are to create a clearer, more de-risked pathway for complex development. Individually, each tool is valuable. Together, they represent a structural shift in how regeneration can be delivered.

Starting from the 2025/26 financial year, the West Midlands will enter a new phase of devolved funding, one that not only expands the size of the pot but crucially expands the region’s freedom to use it.

The Integrated Settlement is designed to shift power from Westminster to Mayoral Combined Authorities, giving regions greater influence over how public money is allocated, and deployed in line with local priorities. The settlement is able to:

• Fund early-stage infrastructure that unlocks stalled sites
• Align transport, housing, skills and regeneration into one programme
• Sequence investment around where private appetite already exists
• Plan long-term rather than react to annual settlements

The 2025/26 settlement offered an early glimpse of what that autonomy can achieve, enabling progress on strategically important regeneration schemes such as:

• Smithgate, Wolverhampton: supported through the English Cities Fund
• Stone Yard, Birmingham: advanced with partners including Moda, Aviva, NatWest and Homes England

These examples show how devolved funding can help unblock sites that have struggled to move forward because of constrained values and high costs.

The 2026/27 Integrated Settlement is a structural change in the region’s ability to deliver growth at scale. And it is this shift, alongside new national funds and private patient capital, that sets the stage for the West Midlands’ most investable period in over a decade.

Building on this foundation, the National Wealth Funds tackle one of the biggest barriers to development – early-stage risk. These funds step in at the points in a project’s lifecycle where most schemes stall, the expensive, uncertain initial phases. By covering these upfront costs, they make sites financially and logistically investable, attracting private capital that might otherwise have stayed on the sidelines. In short, NWF and PIF take on the initial risk so that high-potential projects can be delivered, creating real, tangible impact across the region.

Alongside this sits the Place Investment Framework (PIF). It’s a national framework that guides how early-stage, high-risk projects should be prioritised and supported. The PIF works together with the NWF and the devolved Integrated Settlement, helping determine which schemes should receive early intervention, and ensuring that public investment aligns with locally identified priorities. The Birmingham Sports Quarter could be selected as a priority project under this framework, potentially acting as a PIF Pathfinder for the region.

Together, the NWF and the guiding role of the PIF remove the hardest barriers to delivery, enabling transformational schemes to move forward, unlock private investment, and convert long-standing ambition into real economic outcomes.

In addition to this, the Sterling 20, which is a collaboration of the UK’s 20 largest pension funds, alongside commitments like Legal & General’s £2 billion pledge for affordable housing by 2030, are providing the kind of steady, long-horizon capital that complex regeneration schemes need.

For the region, this matters because it allows developers to secure a funding partner earlier in a project, reduces reliance on short-term or high-interest finance, and supports schemes that are large, complex, or slow to deliver. These funds are comfortable with lower returns over longer periods, making them ideally suited to housing, infrastructure, and multi-phase regeneration projects.

Alongside these public and private funding mechanisms, the West Midlands will also benefit from a new Mayoral Revolving Growth Fund; an evergreen, low-interest investment tool designed to accelerate development in strategically important sectors. Unlike traditional grants, this fund accepts gilt-rate matched returns and then recycles these returns into other schemes within the region, rather than returning them to central government, creating a self-sustaining source of capital for future projects.

The fund is specifically aimed at unlocking commercial, innovation and employment space; the kinds of assets that are essential for high-value job creation but often struggle to stack up commercially due to viability concerns. By taking on part of the upfront risk, the fund helps make these projects viable, enabling developers to move forward with confidence.

For the West Midlands, it signals a step up in financial maturity. The region will have a long-term investment engine capable of supporting regeneration at scale, complementing the wider devolved settlement and reinforcing investor confidence in the region’s ability to drive and sustain growth.

For years, some of the region’s most ambitious projects stalled because early-stage costs, infrastructure gaps, or planning uncertainty made them unviable. Now, the National Wealth Fund, Place Investment Framework, and devolved Integrated Settlement remove those barriers, turning high-potential sites into investable, deliverable projects.

The West Midlands region is ahead of most others with pilots for national funds hosted locally, the West Midlands enjoys a competitive advantage. Central government trust, combined with local autonomy, means the region can lead the way in demonstrating how place-based funding drives large-scale regeneration.

Delivery pace will determine whether the opportunity is realised, the West Midlands has the tools in place, but success depends on execution. How quickly the region can coordinate stakeholders, investments, and deploy capital will decide whether this rare alignment of funding, governance, and private capital translates into tangible growth.