Construction in the UK has stalled as private housebuilding activity fell, according to the latest report on the sector.
The Construction Review by Glenigan, powered by Hubexo, has found that project starts fell by 22% during the three months to the end of August 2025 compared to the previous period, and 36% down year-on-year.
After seeing renewed momentum over the summer, the report says that a series of socioeconomic events, including international turmoil and domestic policies, have impacted both investor and consumer confidence.
Main contract awards were similarly down compared to 2024 (-33%) and shed a quarter of their value in the three months to the end of August (-24%). Detailed planning approvals plummeted, decreasing by 48% during the period, and by 17% year-on-year.
Commenting on the figures, Allan Wilen, Glenigan’s economic director, said: “Once again, the UK construction sector frustratingly seems to have been overtaken by events where a moment in the sunshine over Q.2 and most of Q.3 has given way to the dark clouds of decline, ushered in by socioeconomic uncertainty both at home and abroad. Weakness spans projects of all sizes, with major and underlying schemes both affected, with the residential sector hit hardest.”
“Hiring freezes, rising unemployment and the slow approval of projects by the Building Safety regulator have curbed previous enthusiasm to get projects off the ground, evidenced by the particularly poor performance across the board. Whilst there has been a modest uptick in non-residential performance, it’s nowhere near large enough to make up the difference. It all points to a challenging near-term outlook for the industry.”
The housing sector was the main driver behind the fall, with project starts falling by 10% year-on-year, while main contract awards dropped 44% and detailed planning approvals decreased by 42% year-on-year.
Glenigan says that the sustained downturn reflects the ongoing impact of stamp duty increases, with the private housing sector bearing the brunt of reduced activity across residential project starts, contract awards and planning consents.
Despite the tumultuous backdrop, certain sectors saw increases. Student accommodation doubled year-on-year to £1.064billion, while social housing demonstrated resilience with growth in both starts and approvals during the Review period.
However, with private housing still accounting for 48% of project starts despite a 7% annual decline, the sector’s path forward will largely depend on policy stability and improved market confidence returning to this dominant segment.
Source: Showhouse
