Welcome to This Week in Property, your essential update on the latest UK construction and property news.  As the UK edges closer to its net zero deadlines and the property market braces for another year of economic shifts, new data reveals just how complex and varied the landscape has become. From skill shortages threatening climate goals to stark regional differences in house price performance, the sector is navigating a mix of challenges and opportunities. The latest reports offer a clear snapshot of where the industry stands, and what may shape the market as we head into 2026.

Net Zero challenges

MPs have issued a stark warning that the UK lacks the skills required to hit its net zero targets, raising concerns about the country’s ability to meet its climate commitments. This skills gap comes as the sector experiences its steepest downturn in output for five-and-a-half years, according to the latest PMI data.

Regional variations in UK housing market

The UK housing market shows significant regional variations as we look toward 2026:

• Halifax reports house prices dipping across South England as growth slows nationally
• Midlands property is expected to outperform London
• Northern Ireland construction is ready to rebound
• Hot Scottish areas show robust housing markets

Hamptons predicts that “pragmatism will drive the property market in 2026”, suggesting a more practical approach from buyers and sellers in the coming year.

Budget impact on property sector

Recent budget changes continue to reverberate throughout the property sector:

• Knight Frank warns the budget is stoking rental inflation
• Tenants face rising costs as budget hits landlords
• Four prime London office submarkets face 20%-plus hike in business rates
• Premier Inn owner plans £60m in cuts as business rates reform hits hotels sector

However, Nationwide believes the budget “won’t significantly impact” the housing market long-term, offering some reassurance to homebuyers.

Mortgage and property sales trends

Interesting trends are emerging in mortgage preferences and property sales:

• Half of borrowers now prefer two-year fixes as rate uncertainty grows
• UK Finance reports that mortgage access constraints remain
• Zoopla reveals how fast homes sold in 2025, with sales speeding up and completions climbing
• Budget certainty has spurred short-term boost in prime London property market

The picture that emerges is one of a sector adapting under pressure yet finding pockets of resilience. While policy changes, rate uncertainty and regional disparities continue to influence activity, there are also signs of renewed momentum, particularly where stability and pragmatism guide decision-making. Whether you’re watching the market or actively participating in it, staying informed on these developments will be key to making confident choices in the months ahead.

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