UK Construction Market Report Q4 2025
Executive summary
I’m pleased to be introducing our UK Market Report for Q4 2025. As we reflect on the final quarter of last year, it is clear that the UK construction and property sectors have faced a year of significant challenges, but also opportunities that will shape the future of our industry.
Economic uncertainty has been a defining theme, with interest rates and inflation continuing to dominate concerns. The Bank of England’s decision to cut rates to 3.75% in December, the lowest level in nearly three years, was a welcome step, yet inflation remains above target and confidence across the market is subdued. Our latest survey highlights this nervousness, with contractors and suppliers showing a reduced appetite for risk and a strong preference for two-stage tendering, while affordability and funding constraints have stalled many projects.
Training also came up as a major theme in the survey, with almost a quarter of survey respondents choosing this as their top priority, where they would like to see more governmental support in the coming years.
Despite these headwinds, there are encouraging signs. The Planning and Infrastructure Act, introducing a “default yes” for housing near transport hubs, and major projects such as Universal’s UK theme park approval, signal a commitment to regeneration and growth. Infrastructure remains a bright spot, supported by long-term frameworks, while sectors such as life sciences and defence are poised for substantial investment and innovation. Meanwhile, London’s commercial office market continues to demonstrate resilience, with strong demand for prime, ESG-aligned space and retrofit strategies gaining traction.
As 2026 commences, we anticipate a gradual recovery in confidence, underpinned by strategic investment, collaboration and innovation. The road ahead will require businesses to remain adaptable and consistently focus on sustainability and risk management. At Gleeds, our commitment remains clear: to support our clients in navigating uncertainty and delivering projects that meet the highest standards of quality and performance.
Together as an industry, we will rise to the challenges and seize the opportunities that lie ahead. I hope you enjoy reading our report.
As 2026 commences, we anticipate a gradual recovery in confidence, underpinned by strategic investment, collaboration and innovation.
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