Welcome to This Week in Property, your essential update on the latest UK construction and property news. The UK construction and property sectors are showing cautious resilience, with steady forecasts, major project approvals, and shifting investment trends shaping the landscape. While challenges in housing and rentals persist, new opportunities and regulatory updates are setting the stage for what’s ahead.

Economic outlook: construction & property market shows resilience

PwC has released its latest forecast, predicting 1% growth for the construction sector this year, indicating modest but positive momentum. This aligns with merchants’ forecasts that also anticipate steady growth in the building materials supply chain.

Meanwhile, the Bank of England has maintained the base rate at 4%, providing some stability for mortgage holders, though the property industry continues to monitor the situation closely. The latest data shows house price inflation is dipping as the market awaits potential Budget measures that could provide stimulus.

Major development projects get green light

Several significant projects have received approval this week:

• AXA IM Alts secured planning permission for redevelopment of former BBC studios at Elstree
• Two major Humber Freeport projects totaling 8m sq ft have been approved
• Plans for a £162m Cambridge low-carbon aircraft facility received the go-ahead
• Darlington has selected a Willmott Dixon consortium to lead its town centre regeneration

Construction has also begun on several noteworthy projects including Tilbury Douglas starting work on a £35m Halifax leisure centre and Beard commencing work on Glastonbury’s Baily’s buildings.

Housing market & rental sector challenges

The housing market faces continued challenges, with planning approvals hitting record lows, casting doubt on government housebuilding targets. Housing Secretary Angela Reed has pledged to introduce an acceleration package to speed up planning and boost housing delivery.

In the rental market, buy-to-let landlords are preparing to exit the market amid the Renters’ Rights shake-up, with the next stage of the Renters’ Rights Bill announced. A new report suggests the private rented sector has hit an affordability ceiling, adding pressure to an already strained market.

Investment trends & opportunities

For investors, several trends are emerging:

• Second-tier cities are offering the strongest yield growth compared to traditional investment hotspots
• Cornwall’s coastal property market continues to attract investment interest
• Rents are expected to rise as HMO numbers dwindle, creating potential opportunities for certain landlords
• The property auction market has seen significant annual uplift, with Savills raising £80m across their September sales

Legal & regulatory updates

A significant cladding judgment has confirmed leaseholders are not liable for remediation costs in the Almacantar case, an important precedent for similar disputes. The industry has also backed the FCA Mortgage Rule Review as the consultation period closes.

In safety news, a contractor was fined after an employee was killed by a collapsing wall, and another construction company was fined after fracturing a child’s skull, highlighting the ongoing importance of site safety.

Looking ahead

As the industry moves into autumn, all eyes will be on the upcoming Budget for potential measures to stimulate the housing market, including reports that Chancellor Rachel Reeves is considering staggered stamp duty payments. However, some analysts suggest scrapping stamp duty entirely would be a “tall order” for the current government.

With homeowners showing increased appetite for green upgrades and sustainability concerns continuing to shape the industry, the construction and property sectors are navigating a complex landscape of opportunities and challenges as we head into the final quarter of the year.

From project approvals to regulatory shifts, the past week highlights both the resilience and the pressures shaping construction and property. Staying alert to these changes will be key for anyone navigating the market in the months to come.

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