Press release: AI in real estate set to transform London’s built environment

20 Jun 2024

New report from London Property Alliance based on exclusive industry insight sets out how AI can transform design, planning and development in real estate

  • A new survey of over 300 design, planning and development professionals in central London has found that 90% of respondents see the potential of AI to increase efficiency and productivity.
  • The report shows that the use of AI in the sector is already underway, with nearly 70% of those surveyed having already interacted or worked with AI tools as part of their job.
  • AI has the potential to reallocate time and expertise towards the tasks where a ‘human touch’ is most valued, as 70% of survey respondents believe that their roles will benefit from less repetitive tasks, and 56% think it will result in cost savings.
  • London to benefit from the delivery of new development more efficiently, a faster planning system to support the capital’s growth and real time insights that can decarbonise London’s buildings.
  • A coordinated approach between the public and private sectors at this nascent stage is critical in realising the potential of AI.

The London Property Alliance, which represents the capital’s leading real estate developers and investors, has published a new study examining the potential impact of AI on the sector. The research, AI & the built environment, reveals the extraordinary ability of AI to transform London’s real estate industry, bringing with it vast benefits, including the swifter and improved delivery of new offices and homes and a more sustainable built environment.

An industry survey of over 300 LPA members including developers, architects, construction firms and real estate practitioners in the capital, along with exclusive insights from interviews with those that are pioneering the use of AI in the sector, underlines the scale of the opportunity to drive innovation and efficiencies at all stages of the development process, from site acquisition, to design and delivery.

It also considers how AI can ease the burden on the planning system – which across the UK is managed by 337 different local planning authorities that manually process more than 3.5 million planning applications every year – to support the revitalisation of towns and cities and drive economic growth.

The report – which has been published with input from experts and practitioners from Landsec, Arup, AECOM, City of London Corporation, Foster & Partners, Greater London Authority, Grosvenor and Gardiner & Theobald – identifies five key ways in which London can benefit from the harnessing of AI in the real estate sector:

  1. AI has the potential to facilitate workstreams and deliver new development more efficiently;
  2. An AI-enabled planning system could work faster to support London’s growth;
  3. An accelerated optioneering process can reduce the uncertainty of land speculation and ensure appropriate development densities for urban sites;
  4. AI-generated feedback can inform rational decision-making throughout the design and development process to prevent late-stage issues, redesigns and post-rationalisations;
  5. Real-time insights can steer building management systems towards more sustainable operations to help decarbonise the London property sector, which currently accounts for 78% of the capital’s emissions.

London in particular has much to gain from AI adoption given the intense pressure on land. The LPA’s research concludes that an AI-enabled planning system can support London’s growth since accelerated optioneering processes would reduce the uncertainty of land speculation. This brings several benefits, including the ability to determine appropriate development densities for urban sites and real-time feedback to steer decision making towards more sustainable outcomes to help decarbonise London’s built environment.

While the potential of AI is significant, its use is still at an early stage. The success of AI integration will hinge on authorities being able to access resources, support and funding for local planning departments, as well as collaboration between the public and private sectors. Central Government will have an important role to play in ensuring that planning authorities are keeping pace with AI development to prevent a two-tiered system from emerging between authorities.

Additional support can build on the existing work of local and national government. The Department for Levelling Up Housing and Communities’ PropTech Innovation Fund has provided over £12m to support local authorities speed up their adoption of technology, while City of London Corporation has received funding from the department’s Digital Planning Government Improvement Fund to improve its digital capabilities and explore the use of AI. Elsewhere, the Greater London Authority’s Planning London Datahub is working to build a single open data set of development proposals in the planning process, facilitating the greater understanding and monitoring of the City’s built environment.

Charles Begley, Chief Executive of London Property Alliance, commented:

This report offers a glimpse of the benefits that AI can bring if its potential is fully realised.

“The adoption of AI in the planning system in particular could see the biggest impact – automating resource-intensive manual tasks and enabling a more efficient planning system that optimises data and real-time insights.

“Government support will be critical in enabling AI adoption across planning authorities, accelerating the delivery of much-needed new office space and homes which will support London’s growth. Whoever forms the next government should continue to build on the great work underway at a national and local level to ensure AI’s extraordinary benefits are harnessed.”

Further Reading:

Report: AI and the Built Environment

Event: AI and the Built Environment Exclusive Preview