As 2025 draws to an end and thoughts turn to the year ahead, in this series of articles we’ve sourced the viewpoint of various leading industry figures. This time we’ve sought the input of individuals from the likes of the Federation of Master Builders, CG Bonds, Arup, BCIS, and Chase New Homes to gather their opinions on how the last 12 months have been for construction and to get their predictions for 2026.
John Newcomb, CEO of the Federation of Master Builders:
“2025 proved to be another testing period for the construction sector and the building materials supply chain.
“Despite initial hopes of a recovery in the second half of the year, the forecasted turnaround failed to materialise. In particular, the housing market slowed in the third quarter, with housebuilders adopting a cautious approach ahead of the Autumn Budget, which ultimately fell short of delivering the stimulus required to reignite the housing market.
“This omission has left a significant gap between the Government’s ambitious target of 1.5m new homes by the end of this Parliament and the reality of delivering them. The BMF will continue to advocate for government incentives to speed delivery of much-needed homes.
“Nevertheless, there is a glimmer of hope on the horizon. With interest rates gradually declining, the BMF forecast is for slight growth in both new-build and repair, maintenance, and improvement (RMI) projects, particularly during the second half of 2026.
“In anticipation, we are doubling down on our efforts to support members, investing in initiatives like BMCareers, which is already attracting a diverse, new talent pool into the industry. Our latest enhancement to the BMCareers website, the launch of an online recruitment platform with access to hundreds of current vacancies, underscores our proactive approach to addressing future workforce needs.
“Data Yard, our collaborative venture with NMBS, is creating an industry-owned data pool to streamline product information sharing and enhance supply chain efficiency.
“The BMF remains committed to supporting members and advocating for government action to ensure Britain’s building industry is ready to thrive in 2026.”
Dane Westwood, performance bond construction specialist at CG Bonds:
“The construction sector entered 2025 with mixed signals. Activity has steadied in some regions, yet pressure on pricing, labour and tender pipelines has created a period of careful decision-making. Tender prices continue to rise as contractors manage higher labour costs and lingering pressure from global trade routes. Although material inflation has levelled off, firms are still dealing with costs that sit well above 2019 levels, and this continues to shape how projects are planned and priced.
“Across the market, there has been growing attention on financial stability during procurement. With insolvencies still above pre-2020 levels, developers are carrying out more detailed checks before awarding contracts. This has encouraged a more structured approach to risk, with closer analysis of contractor strength, fixed-price exposure and the resilience of supply chains. Bond discussions now tend to take place earlier in the process, reflecting wider efforts to reduce disruption and maintain programme certainty.
“Looking to 2026, confidence should lift as public budgets settle and housing activity improves. Civil engineering and utility work offer steadier workloads, giving firms a clearer base for long-term planning. The hope is that greater stability will allow contractors and clients to move past the reactive approach seen in recent years and focus on building more reliable pipelines. If this develops as expected, the sector could enter 2026 with a more predictable outlook.”
Matt Collinson, Property Business Lead, UKIMEA, Arup:
“The property market has faced real challenges in 2025. Construction and finance costs have remained high. Now more than ever, it’s important that we work with our clients to find new ways to ensure project viability.
“As we look ahead to exciting projects that will enter the delivery phase in 2026 and to the next generation of buildings, we must ensure ESG drivers remain central to the industry. At Arup, we use the phrase ‘zero carbon at zero extra cost’ – reflecting our understanding that the lower carbon option need not cost more. To achieve this, adaptability and innovation will be key, and I’m confident in the sector’s ability to evolve.
“AI is a key reason for optimism in this regard. The construction industry has only scratched the surface, but it’s already helping us improve outcomes and reduce costs.
“We are also working to introduce new, lower carbon buildings with innovative structural frames, all while reducing construction time and waste. Retrofit and decarbonisation will also be focuses for 2026, often offering cheaper and less carbon intensive options than new builds.
“To meet ambitious targets, from constructing 1.5m homes to playing our part in achieving net zero, the industry must move from competition to collaboration. Working together is the key to unlocking viability for clients while delivering more sustainable construction.”
Dr David Crosthwaite, chief economist at BCIS:
“The defining theme of 2025 has been waiting for an uptick in activity levels that has yet to come. The sector has shown resilience, but the long-anticipated rebound continues to elude us. Tender prices have risen modestly, reflecting a market that is steady rather than strengthening.
“Skills shortages, cautious client sentiment and a slower but persistent increase in materials costs all point to an industry still working through deep structural challenges. It is becoming increasingly clear that the legacy of the pandemic will take the best part of a decade to fully unwind.
“This defining period disrupted supply chains, capacity, investment decisions and labour dynamics in ways that continue to shape the sector’s performance today. Many of the constraints we are still facing are not short term market fluctuations, but the long tail of those shocks working their way through the system.
“This year has seen clients place greater emphasis on increased certainty, value and risk management. Meanwhile, evolving expectations around net zero and carbon reporting are reshaping how projects are appraised and funded.
“More clients now recognise that cost and carbon need to be assessed together to deliver viable, future ready schemes. Looking to 2026, there is cautious optimism.
“Greater clarity on pipelines, financing models and policy commitments would help unlock investment, while continued adoption of digital tools and better collaboration across the supply chain can support productivity gains.
“If confidence returns, 2026 could begin to deliver the uplift the industry has been waiting for.”
Paul Bennett, Sales & Marketing Director at Chase New Homes:
“Market conditions have remained challenging throughout the year. The uncertainty surrounding the Budget has affected confidence in both the UK economy and the property market. House Price Index growth in London and the South-East has been subdued, while households continue to face mounting pressure from inflation, which is cutting into spending power and weakening overall market sentiment.
“It has also been frustrating that, despite the government’s call to ‘Build, Build, Build,’ the reality has been ‘Stop, Stop, Stop.’ The introduction of the Building Safety Regulator and ‘The Gateways’ has left developments with full planning permission stalled in limbo for up to 18 months. At present, it is difficult to identify any short-term positives: lenders are taking far too long to process mortgage offers, some as long as 10 to 14 weeks, and with unemployment now at 5% and GDP growth below 1% in first half of 2025, an uptick in the housing market appears unlikely.”