Gateways 2 and 3: improving visibility, changing capital behaviour

Gateway 2 has been one of the most challenging variables for lenders and investors to price into UK residential development over the past two years. That position is now starting to evolve.

Recent Building Safety Regulator (BSR) transparency release report shows a clear improvement in both throughput and determination times at Gateway 2:

- Since late summer 2025, the BSR has issued in excess of 570 Gateway 2 determinations, with decision volumes increasing month-on-month.

- The median time to decision across all Gateway 2 applications is now circa 18 weeks, materially lower than earlier in the process.

- Approval rates on valid submissions continue to improve, with increasing use of “approval with requirements” to allow schemes to proceed without unnecessary delay.

This government data is increasingly being reinforced by market evidence. Developers and contractors are now publicly reporting Gateway 2 approvals in the low-teens to low-20-week range where schemes are genuinely construction-ready. Most notably, HG Construction recently confirmed Gateway 2 approval in a record breaking 13 weeks on a London HRB residential scheme, a timeframe that would have been considered extremely optimistic not long ago.

The BSR has also acknowledged progress at Gateway 3, with clearer guidance on information requirements and inspection sequencing beginning to reduce uncertainty around completion risk. While Gateway 3 remains a critical control point, early engagement is improving confidence that practical completion delays can be managed more effectively than initially feared.

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What this means for funding and investment

For many lenders, Gateway 2 approval has effectively become a hard pre-condition to funding. Traditional development facilities are often not being advanced until Gateway 2 is secured, reflecting a more cautious approach to start-on-site risk.

As a result, Kingswood is seeing the emergence of Gateway 2 bridging and pre-approval finance products being provided by non-traditional lenders, designed to fund schemes through the final stages of design development and regulatory approval. These products are filling a structural gap in the market and enabling sponsors to maintain momentum while managing regulatory risk.

Improved visibility across Gateways 2 and 3 is therefore:

- Reducing uncertainty around construction start and completion dates

- Supporting more robust underwriting of programme and cost-of-carry risk

- Improving confidence in exit timing and stabilisation assumptions

This is feeding through to sentiment across living asset classes where regulatory delay had been most acutely felt.

At the same time, capital behaviour continues to adapt. Kingswood has seen a rise in hotel schemes coming forward, driven in part by the fact that hotels sit outside the Gateway regime and offer a more familiar delivery risk profile while residential Gateway exposure has been harder to price.

Regulatory risk is not disappearing, but it is becoming measurable and capital is responding accordingly which can only be a positive step towards delivering much needed living assets.

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