Welcome to This Week in Property, your essential update on the latest UK construction and property news. In this week’s roundup, we explore the latest developments across the construction and property sectors, from major project announcements and leadership changes to market trends and technological innovations shaping the industry. Stay informed with insights on residential and commercial property, rental markets, and the latest initiatives tackling skills shortages, helping you navigate the ever-evolving UK property landscape.

Residential property market insights

The latest RICS residential survey reports a flatlining market, with house prices set to stagnate for the rest of the year. However, some segments show strength, with Foxtons finding a growing market for new build homes in London.

An interesting trend is emerging with more people remortgaging rather than buying, as an analysis of searches finds remortgage approaching parity with purchase. The latest base rate cut is expected to boost rental affordability.

Family considerations remain a major factor in property decisions, with most parents willing to pay a premium to live in top catchment areas – as much as 25% more according to data. Additionally, many youngsters have a big influence on home choice.

Buy-to-let and rental market updates

The rental market is experiencing mixed conditions, with tenant demand strongest in Yorkshire and migrant workers helping London rentals defy economic gloom.

Landlords face both opportunities and challenges, with rental stock rising despite Renters’ Rights Bill concerns. However, landlord repossessions are up 11% year-on-year, and the leasehold system is reportedly blocking landlords from buying or improving flats.

Technology adoption continues with a new AI tool launching to automate tenant communication, aiming to streamline property management processes.

Commercial property market trends

The commercial property sector is showing resilience with investor sentiment lifting property values in Q2 despite ongoing macroeconomic uncertainty. UK office take-up has reached its highest rolling total in three years, indicating growing confidence in the office market.

Notable commercial property transactions include:

• Groupon committing to east London flex space at Aldgate Tower
• Liverpool Street’s Devonshire Square securing four new tenants
• Biotech firm Relation doubling its footprint at British Land’s 338 Euston Road

Construction sector shows signs of recovery despite challenges

The UK construction industry showed positive momentum in June, with the Office for National Statistics (ONS) reporting a return to growth after previous months of contraction. This encouraging development comes as companies like Octavius report solid growth and Balfour Beatty smashes its margin target, demonstrating resilience in parts of the sector.

However, doubts remain about the pace of recovery, with ongoing concerns about materials supply and economic uncertainty. An aggregate survey highlights the need for action on falling reserves, indicating potential challenges ahead for raw material availability.

Major projects and contracts announced

Several significant projects have been announced this week:

• Vistry has acquired the former Rugeley Power Station site with plans to develop 2,300 homes
• McLaren has secured a £100m flagship LSE redevelopment
• Knights Brown has won a £29.4m Poole flood defence scheme
• Willmott Dixon has been chosen for a £14.4m Sheffield city centre project
• Kier has landed its first Southern Water framework job

The Clifton bridge replacement works are now underway, while Morgan Sindall has completed what’s being called the UK’s most accessible castle.

Technology and innovation in construction

Innovation continues to drive the construction sector forward:

• Komatsu has moved to factory-fitted machine control, enhancing equipment efficiency
• The new STREAM app has been designed to prevent workers from being hit by plant machinery
• Engineers have developed a facade design tool that claims to slash costs

Training and skills development

The construction industry is addressing skills shortages with several initiatives:

• CITB has launched a Training Provider Network
• The government has rebranded construction training
• Surveyors are being offered Cambridge education in sustainability
• HBF has updated its skills plan to attract and train homebuilding workers

Mixed signals as markets adapt

Overall, this week’s news shows a construction and property sector navigating complex challenges while finding pockets of growth and opportunity. While economic uncertainty persists, technological innovation, strategic investments, and adaptation to changing market conditions are helping companies remain resilient. The forecasts suggest residential transactions in 2025 will easily outstrip last year, indicating longer-term optimism despite current headwinds.

Stay ahead of the curve by joining us at our upcoming property events. Connect with industry leaders, gain insights from expert speakers, and network with fellow developers, investors, and professionals. Whether you’re new to property or scaling your portfolio, our events are designed to keep you informed and inspired.