Market Data
UK construction starts climb on housebuilding surge—but infrastructure lags behind
UK construction saw a modest but welcome revival in the three months to April 2025, with project-starts rising 7% on the previous quarter and standing 3% higher than a year ago, according to Glenigan’s latest Construction Index. While gains across the industry were uneven, a surge in residential activity provided a vital shot in the arm for the sector.
The residential sector was the standout performer. Private housing starts soared 22% compared to the previous quarter and leapt 29% year-on-year, reflecting growing confidence among developers amid easing borrowing conditions. Social housing also posted robust growth, up 29% on the quarter and 3% on last year, buoyed by a seasonal uplift and local authority initiatives.
Overall, residential project-starts climbed 24% on the quarter and 22% annually, offering the strongest signal yet that the housebuilding market may be emerging from a prolonged downturn.
“This uptick in activity is encouraging,” said Allan Wilén, Glenigan’s Economics Director. “Builders were reporting falling workloads at the end of last year, reflecting real uncertainty. But these latest figures, particularly in residential, suggest that fortunes may be starting to turn. The Government’s spending review in June will be a crucial moment to sustain this progress—especially for infrastructure.”
Indeed, outside housing, performance was mixed. Office developments saw a dramatic 61% quarterly boost—driven by schemes like the £54m Blackpool Airport relocation—while community, amenity and health projects also recorded gains. But retail (-19% quarterly, -33% annually) and hotel & leisure (-26% quarterly, -25% annually) continued to contract amid cautious consumer sentiment.
Civil engineering was the weakest link, with starts down 22% both quarterly and year-on-year, highlighting delays in infrastructure and utilities projects.
Regionally, the South West and South East led the pack with strong quarterly and annual gains. London rebounded 22% from the last quarter, but remains 10% down on last year’s figures.
While Glenigan’s data points to early signs of recovery, particularly in residential construction, the broader sector remains fragile. The pace and shape of growth in the second half of the year will likely hinge on policy clarity, especially around public spending and infrastructure investment.
