Activity falls amid project delays linked to Budget uncertainty
Total construction output in Great Britain declined by an estimated 1.1% in the three months to November 2025, the largest quarterly fall since March 2023, when a 1.4% drop was recorded.
Both new work and repair and maintenance activity decreased over the three-month period, down by 1% and 1.1% respectively. At sector level, four of the nine construction subsectors recorded falls. The main drag on overall performance was private housing repair and maintenance, which shrank by 3.7% over the period.
On a monthly basis, total construction output is estimated to have fallen by 1.3% in November 2025. This followed a downwardly revised 1.2% decline in October, after a modest 0.3% increase in September. The November fall reflected lower volumes in both new work and repair and maintenance, which dropped by 1.9% and 0.4% respectively.
According to industry feedback, some projects were delayed and client spending was affected by uncertainty in the run-up to the Autumn Budget announcement.
Neil Leitch (pictured right), managing director of development finance at Hampshire Trust Bank, said current conditions were reinforcing concerns that have built throughout last year.
“These figures reinforce what has been evident throughout 2025,” he noted. “It has been a disappointing year for housebuilding, marked by a persistent gap between ambition and delivery. Developers want to build, demand from buyers and tenants is clear, but the conditions required to move schemes forward with confidence are still not in place.
“Planning remains the most significant structural issue. The challenge is not intent, but capacity and consistency. Planning departments are under-resourced, decision times are lengthening, and experienced planners are leaving the profession. Without sustained investment in skills and local authority capacity, reforms on paper will struggle to translate into homes on the ground, including the proposed changes to the National Planning Policy Framework.”
Leitch said that while the government has introduced funding to support the recruitment of junior planners, industry estimates suggest the overall pipeline remains thin, with fewer new entrants than the sector needs to replace those leaving. He added that Local Planning Authorities also struggle to compete with the private sector on pay and career progression, making retention increasingly difficult and placing further strain on already stretched teams.
“There is no single fix for these issues, but confidence is the critical missing ingredient,” Leitch stressed. “Developers, particularly SMEs, need certainty that approvals will lead to starts and that delays can be managed realistically. What is often overlooked is the time lag in development. Decisions delayed today will translate into weaker output years down the line, long after the focus has shifted elsewhere.
“Funding is available for well-structured, viable schemes, but projects need flexibility built in from the outset to cope with the realities of delivery. Without that confidence and consistency, the risk is that 2026 looks much like 2025.”
For lenders and intermediaries active in development and specialist finance, the combination of weaker construction output, constrained planning capacity and fragile developer confidence suggests that project timelines may remain under pressure into 2026. Delays at the planning and delivery stages could affect build-out schedules, sales pipelines and the timing of completions feeding into mortgage markets.
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