Welcome to This Week in Property, your essential update on the latest UK construction and property news.  As the year draws to a close, the UK property and construction sectors are entering a period of meaningful change. From landmark planning reform becoming law to interest rate cuts and shifting market forecasts, the signals heading into 2026 are mixed, but increasingly optimistic. Here’s a clear snapshot of the key developments shaping the outlook for the year ahead

Landmark planning legislation receives Royal Assent

In a significant development for the UK construction and property sectors, the Planning and Infrastructure Bill has officially received Royal Assent, becoming law after months of parliamentary debate. The legislation, described as “landmark” by industry insiders, aims to streamline the planning process and boost housing delivery across the country.

Industry reaction has been largely positive, with many property professionals expressing optimism that the reforms will create greater clarity and confidence for developers. The new law is expected to help unlock development potential and address the UK’s housing shortage.

However, not all sectors are celebrating. Quarry firms have criticised aspects of the reforms, suggesting they may not adequately address the needs of the materials supply chain.

Bank of England cuts base rate to 3.75%

In a widely anticipated move, the Bank of England has reduced interest rates to 3.75%, providing potential relief for mortgage holders. This decision followed a sharp drop in inflation and is expected to positively impact the property market.

Estate agents have reacted positively to the news, the industry hopes that the cut will stimulate buyer activity heading into 2026.

Housing market forecast for 2026

Rightmove has released its 2026 house price predictions, suggesting a buyer’s market may emerge next year. The property portal also indicates that mortgage payments could become cheaper than renting for the first time in several years.

Meanwhile, Zoopla reports that while house price growth has stalled, transaction volumes are increasing, indicating a potential market recovery.

Industry professionals appear divided on the 2026 outlook, noting significant confidence gaps between sales and lettings agents.

Looking ahead to 2026

As 2025 draws to a close, the construction and property sectors appear cautiously optimistic about 2026. The combination of planning reforms, interest rate cuts, and increasing transaction volumes suggests a potential market recovery, though challenges remain in areas like civil engineering and materials supply.

Halifax has predicted modest capital appreciation in 2026, while industry expert Jonathan Rolande shared why he is “cautiously optimistic” about the year ahead.

With the new Planning and Infrastructure Act now law and interest rates moving downward, 2026 may indeed see the housing market shift from subdued to steady as many industry observers predict.

Taken together, these developments suggest a market that is no longer standing still. While uncertainties remain, particularly around supply chains, costs, and regional performance, the direction of travel feels more settled than it has in recent years. As planning reforms bed in and borrowing costs ease, 2026 may mark a transition from caution to confidence for those ready to adapt and move decisively.

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