Kick-starting private housebuilding key to construction sector recovery, Glenigan finds
Glenigan’s latest Construction Index finds that construction starts on-site declined by 9% in the three months to January 2026, 16% below 2025 levels.
The February Index shows that, despite strong forecasts from Glenigan and other providers, the sector remains stuck in the firm grip of market depression.
Whilst commercial office and industrial project starts remain resilient, the strong performance in these verticals was not enough to offset the shortfalls in others. Residential project starts, or rather the lack of them, remains a thorn in the industry’s side.
Glenigan says that, whilst there’s plenty of ‘jam tomorrow’ around policy reform promised by the government, investors will be waiting for stronger demand from housebuyers before making the essential firm commitments to kick-start private housebuilding.
Other verticals gradually began to stabilise, with civils perhaps the most encouraging, bolstered by a surge in utilities-related activity as investment by the water and energy industry gathers momentum. Education also stood out, suggesting the public sector funding is finally being released not only to accelerate the RAAC Remediation programme but also refurbish a large proportion of crumbling school stock.
However, for Glenigan’s economics director, these results pale in significance when measured against the inability of the residential sector to re-establish its momentum.
Allan Wilen said: “Housing is often seen as the bellwether for industry confidence and prospects. This is all too evident in our latest Index with a sharp drop in private residential projects dragging down overall construction starts. Whilst a stabilisation in civil engineering work and a rise in non-residential activity are welcome, a strengthening housing market and increase in private housebuilding will be key to lifting overall project starts during 2026.”
The residential construction sector has seen a continued decline since summer 2025, with overall starts falling by 24% during the Index period and down 32% compared to 2025 figures.
Drilling deeper, private housing saw the largest decline, with activity falling by 38% compared to last year and by 30% against the preceding three months.
Social housing, which had recently experienced a modest upturn, once more found itself lagging 9% behind the previous three months’ performance and 2025 levels.
From a non-residential perspective, office starts continued on an upward trajectory, rising to 7% against preceding three months to achieve a 21% growth on last year’s figures.
The commencement of various schemes supported continued activity increase in this vertical, including the £32million The Interchange at Brabazon on the former Filton Airfield in Bristol.
Similarly, industrial performance, which saw improvement at the back end of 2025 remained robust, registering a 2% uptick in starts against the preceding three months, standing 10% higher than last year’s results. The commencement of the £57.5million Axis Works Plot 1 storage and distribution unit development in Bristol was the primary driver for these strong figures, alongside a handful of other, smaller developments.
On a regional basis, London saw the biggest rise in construction, up 41% against the preceding three months and a third up against the previous year. Northern Ireland also demonstrated strength, with starts on-site rising by 27% during the Index period and by 11% on 2025 results.
Performance was inconsistent in the East Midlands and North West, with both regions rising against the preceding three months, but remaining below the previous year.
Elsewhere, the West Midlands is experiencing a particularly poor period, falling by a fifth during the Index period and by 23% against 2025 levels. The South East also saw a decline of 22% against the preceding three months to stand 15% down compared to the previous year.
Source: Showhouse
