Welcome to the last in our series of Forward Thinking articles.
As the year draws to a close, we’re reflecting on recent changes, and looking ahead to 2026 and beyond. We asked Matt Ling, Leep’s Director of Business Development, to share his thoughts.
What are the top three pain points you’re earing from customers right now? Do you expect these to change over the next year?
The New Appointments and Variations (NAV) process requires 180 days, but we’re now seeing timelines stretch to nine months or more. More developers want to do NAV adoption but have to get Ofwat’s approval before they can turn water on for customers; Ofwat simply doesn’t have the resources to handle the volume of applications they’re receiving.
The second major pain point in water is escalating infrastructure charges. These payments keep rising year after year, meaning developers have to pay more and more money for their network. It’s creating serious cash flow challenges on their already tight margins.
The third challenge is around heat networks, where there’s uncertainty about which direction to go in. Developers are hesitant to commit because of the cost implications for end customers and planning requirements that vary by location. Everyone’s waiting for someone else to go first.
Some of this will change over the next year as planned regulation changes come into force, but some of the challenges won’t disappear until there’s more structural reform.
What regulatory changes are customers most worried about? Do you agree with them?
There’s definitely concern about the heat network regulation coming in 2026. It’s good for consumers to have more certainty and greater reassurance but could be challenging for developers who currently run their own heat networks as part of larger operations. It’s often not their core business function, and it’s going to need a much more specific customer service infrastructure and technical expertise to handle increased regulatory requirements. We’re certainly seeing interest from developers looking to divest these assets.
For me, I think the biggest regulatory challenge is in the water sector. Specifically, the lack of a level playing field across the UK. NAVs still can’t manage water (for specific areas or developments, known as ‘insets’) in Scotland, and it remains extraordinarily difficult to work in Wales, too. So, while more developers want to use NAVs, for many it remains impossible to do anything but continue with the incumbent provider, which reduces the choice of operating models – and cost models – available to them.
Will continued regulatory reform in the utilities sector create new opportunities for developers?
If they can look at things differently, yes, I do think there are opportunities. For example, with infrastructure charges going up, incorporating greywater recycling or other green water initiatives can earn credits that offset infrastructure charges. So rather than viewing rising costs as an inevitable burden, it’s possible to use green techniques to reduce overall construction costs.
I’m also watching the data centre and AI boom with interest. The number of Data Centres is set to rise by nearly 20% over the next five years, with almost 100 new sites planned to meet the growing demand for artificial intelligence and digital services. Each one is equivalent to more than 15,000 houses in terms of power consumption. This will require massive infrastructure upgrades, which may help unlock smaller developments in the surrounding areas if managed correctly.
If market conditions remain uncertain, what can developers do to adapt and future-proof their businesses?
Engaging with your NAV or IDNO provider early on in a project is critical. They can help developers to build systems that will generate the maximum asset value on adoption, but also provide the advice needed to, for example, reduce costs through environmental credits, as well as prevent issues with utilities from slowing down the project. The reality is that a wrong approach can significantly affect costs and timelines.
I think it’s also important for developers to be building realistic forecasts rather than optimistic ones. We know that the government’s housing targets are nowhere near being met – we’re probably nearer half the number needed. That gap has massive implications for business planning and cash flow.
Finally, reputation management matters more than ever. When projects get delayed due to utility issues – particularly water – developers face serious reputational damage and potential claims. Choosing partners who genuinely understand the landscape, particularly the regulatory side, and can navigate it effectively protects your brand while reducing your costs, too.
What questions should developers be asking utility providers now to ensure their projects remain viable and attractive to end users?
First, they should expect transparency in pricing so they can understand exactly how much they will get for their network. Can the provider clearly explain how costs are calculated and what’s included? Hidden costs or vague estimates will cause problems down the line.
Second, what’s the provider’s track record with customer service? Once homes are occupied, who handles resident queries and issues? Many developers discover too late that they, or their managing partner, can’t deliver on the customer service side, which reflects badly on the developer.
And thirdly, what green credentials or initiatives can the utility provider help the developer leverage to reduce costs? The opportunities to offset infrastructure charges through environmental innovations are only achievable if your provider understands these mechanisms.
With increasing focus on ESG credentials, what utility solutions will customers need to meet their sustainability commitments?
I think the answer to this comes from two sides. There’s obviously technology and market solutions. For example, microgrids are gaining serious traction. The concept of having solar panels, battery storage, and possibly air source heat pumps working together on smaller developments offers genuine green credentials.
But delivering on ESG increasingly requires businesses to meet social and other requirements. For example, for larger or strategic developments, some customers ask us to support local employment and community engagement by recruiting team members from the local area, or through offering work experience, or by engaging with nearby universities. It may sound like doing things to tick boxes, but we understand the importance of these initiatives to our customers, and we’re pleased to support them.