House-building in the UK is not expected to return to pre-pandemic levels until the end of the decade, according to the Construction Products Association (CPA).
The trade body’s latest autumn forecast warns that the government is likely to fall 30% short of its pledge to deliver 1.5 million new homes by 2029. The CPA said new-build housing output will not recover to 2022 levels until at least 2028, and to pre-pandemic levels until 2029 or 2030.
CPA chief executive Peter Caplehorn has written to Chancellor Rachel Reeves urging the government to reinstate support for homebuyers, particularly first-time buyers.
“We recommend the Home Builders Federation’s idea for a replacement equity loan scheme for first-time buyers,” Mr Caplehorn said. “It would boost deposits and make new build mortgages more affordable. Developers would pay a fee for access to the scheme, while government would retain the equity share and potential returns.”
He also called for the creation of a “delivery authority” to oversee the retrofit of the UK’s existing housing stock. He urged ministers to prioritise repair and maintenance projects over new infrastructure schemes.
“In a tight budgetary environment, focusing on near-term repairs and maintenance offers quicker returns for taxpayers and provides a more immediate stimulus for the sector,” he added.
Growth forecasts downgraded
The CPA has downgraded its growth forecasts for the construction industry, cutting expected output from 1.9% to 1.1% this year and from 3.7% to 2.8% for 2026.
It blamed a sluggish summer for the decline in construction activity and said the recovery expected earlier in the year had failed to materialise. With tax rises expected in the 26 November budget, the CPA warned that many households and investors are delaying major spending decisions, further limiting demand.
Noble Francis, CPA’s economics director, warned that more construction firms are likely to go under if the government does not intervene.
“Construction has already lost more than 11,000 firms since early 2023,” he said. “Given current low levels of house-building and home improvement, we expect insolvencies to accelerate in 2026. A positive, time-limited stimulus for house-building demand is urgently needed—particularly for first-time buyers—before insolvencies further damage skills and capacity throughout the supply chain.”
Industry voices concern
CPA chair Adam Turk, who is also chief executive of insulation manufacturer Siderise, said the sector was bracing for worsening job losses and skills shortages unless action is taken.
“This is not scaremongering but an honest reflection of what is happening on the ground,” Mr Turk said. “We’ve already seen house-building collapse in London, and while we’re encouraged by recent government intervention there, that help is needed nationwide.”
He added that many firms had invested heavily in staff and resources since the 2024 election, anticipating a housing recovery. “Without a market boost, much of that investment could be in vain,” he warned.
