Construction starts slump as housing confidence falters

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The UK construction industry is facing renewed decline, according to the latest Glenigan Construction Index.

The report, which reviews project starts in the three months leading up to the end of September 2025, shows that overall activity has fallen sharply, reversing gains seen earlier in the year.

Work starting on projects worth less than £100m – regarded as the industry’s “underlying” activity – dropped 16% compared with the previous three months, and remained 15% down on the same period in 2024.

The residential building sector was hit hardest, with starts falling by more than a quarter compared to the previous quarter and down 24% from last year. Non-residential work also declined, dropping 9% compared to the preceding three months and 5% year-over-year.

There were some areas of growth. Office projects rose by almost a third on the previous quarter and more than doubled on the year. Notable schemes included a £86m revamp of Bush House, the former headquarters of the BBC World Service, and a £59m retrofit of 30 Finsbury Square in the City of London.

However, Glenigan’s economic director Allan Wilen said these gains were outweighed by sharp falls in other areas, including health and education.

He warned that residential work in particular was being held back by weak buyer confidence and delays linked to Building Safety Regulator approvals.

“Encouraging signs in the middle of the year have once more given way to further decline,” he said, adding that the industry would be looking to the government’s autumn budget for support.

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Construction starts slump as housing confidence falters

ADVERTISEMENT

The UK construction industry is facing renewed decline, according to the latest Glenigan Construction Index.

The report, which reviews project starts in the three months leading up to the end of September 2025, shows that overall activity has fallen sharply, reversing gains seen earlier in the year.

Work starting on projects worth less than £100m – regarded as the industry’s “underlying” activity – dropped 16% compared with the previous three months, and remained 15% down on the same period in 2024.

The residential building sector was hit hardest, with starts falling by more than a quarter compared to the previous quarter and down 24% from last year. Non-residential work also declined, dropping 9% compared to the preceding three months and 5% year-over-year.

There were some areas of growth. Office projects rose by almost a third on the previous quarter and more than doubled on the year. Notable schemes included a £86m revamp of Bush House, the former headquarters of the BBC World Service, and a £59m retrofit of 30 Finsbury Square in the City of London.

However, Glenigan’s economic director Allan Wilen said these gains were outweighed by sharp falls in other areas, including health and education.

He warned that residential work in particular was being held back by weak buyer confidence and delays linked to Building Safety Regulator approvals.

“Encouraging signs in the middle of the year have once more given way to further decline,” he said, adding that the industry would be looking to the government’s autumn budget for support.

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