At a Glance
⚙️ Glenigan tracks £39bn of major project starts for 2026, with civil engineering dominating and residential still in retreat. (Source: Build in Digital, PBC Today)
🏗️ The UK construction market is forecast to grow to c.USD 391bn by 2031, but near-term output remains weak with housing and R&M still contracting. (Source: Mordor Intelligence, ONS)
🏛️ Major housing and planning reforms – including devolution of powers, the Planning and Infrastructure Bill and new renters’ protections – will start to reshape residential delivery models from 2026. (Source: Greenberg Traurig)
🚆 A new wave of big-ticket infrastructure and energy schemes – from the Lower Thames Crossing to hydrogen and CCS – is moving towards site, reinforcing civils as the main growth engine. (Source: Construction Wave, IOM3)
🌱 The Hamburg Declaration and a record 8.4GW CfD round lock in long-term offshore grid and renewables build-out, but grid reform and nuclear baseload remain critical enablers. (Source: GOV.UK, Forvis Mazars)
Today’s update: 2026 is shaping up as a year where civils and clean energy carry the construction market, while residential and commercial still struggle to regain momentum. At the same time, a dense thicket of housing, planning, safety and renters’ reforms is beginning to rewire risk and viability on new schemes. Here’s what you need to know to stay ahead today.
Ongoing Stories
🏛️ Following earlier coverage of the Planning and Infrastructure Bill, today’s notes confirm it has now received Royal Assent as the Planning and Infrastructure Act 2025, with concrete provisions for “grey belt” release and transit-oriented development set to accelerate housing around stations. (Source: Construction Wave)
🏛️ Returning to renters’ reform, new detail on the Renters’ Rights Act shows fixed-term tenancies will be banned from May 2026, tightening regulatory headwinds for BTR and PRS investors already weighing tax and building safety changes. (Source: Greenberg Traurig)
🌱 Building on previous clean energy planning coverage, the Hamburg Declaration adds a cross-border offshore grid and hybrid interconnector dimension, pointing towards much larger coordinated North Sea infrastructure programmes. (Source: GOV.UK)
Top 5 Headlines
⚙️ £39bn of Top 100 project starts set to reshape 2026 construction workload
Glenigan forecasts £39bn of construction work from the UK’s Top 100 projects starting on site in 2026, with civil engineering and infrastructure schemes accounting for £23.8bn across just 29 projects. Flagship schemes include the £10.2bn Lower Thames Crossing tunnels, a £1.25bn public realm and highways upgrade in Westminster, and £483m of Haweswater Aqueduct water infrastructure works. Civil engineering output is projected to grow 17% in 2026 and 15% in 2027, while Q4 2025 still saw a 20% year-on-year fall in residential starts, underlining an uneven pipeline. For contractors and suppliers, this tilts opportunity towards large civils and utilities frameworks even as housing exposure remains fragile. (Source: Build in Digital, PBC Today)
🏗️ UK construction market to reach c.USD 391bn by 2031 amid slow near-term recovery
The UK construction market is valued at around USD 325bn in 2026 and is forecast to grow at a 3.77% CAGR to approximately USD 391bn by 2031. Output growth of 2.8–4.5% is expected in 2026, with infrastructure the fastest-growing segment at a 7.9% CAGR, supported by programmes such as HS2 and offshore wind, while residential retains a 38.1% share but continues to miss government housing targets. ONS data still shows a 1.3% drop in construction output in November 2025, with both new work and maintenance – particularly private housing R&M – in contraction. The data suggests a medium-term growth story but a 2026 trading environment that will reward firms positioned in infrastructure hot spots and resilient subsectors such as logistics and data centres. (Source: Mordor Intelligence, ONS)
🏗️ Housing market heats up as regulatory overhauls tighten viability screws
Rightmove reports a record January 2026 house price jump of 2.8% month-on-month to £368,031, driven by post-Budget buyer demand and falling mortgage rates, with top-end properties up 2.6% month-on-month. At the same time, London faces slow sales and high unsold stock despite expanding build-to-rent supply, prompting draft London Plan guidance to push faster delivery and higher affordable quotas, including CIL relief incentives. Overlaying this are the English Devolution and Community Empowerment Bill, imminent Planning and Infrastructure Bill reforms, the new Building Safety Levy from October 2026 on schemes of 10+ dwellings, and the Renters’ Rights Act ban on fixed-term tenancies from May 2026. For developers and investors, buoyant pricing is offset by a mounting stack of planning, safety, tax and tenancy rules that will need to be priced into land bids and exit strategies. (Source: Rightmove, Greenberg Traurig)
🚆 New infrastructure and energy wave: Lower Thames Crossing, rail upgrades, hydrogen and CCS
Major programmes are lining up for 2026, including the £9.2–10.2bn Lower Thames Crossing – expected to cut Dartford Crossing congestion by 20% – and £589m for design and engineering on the Transpennine Route Upgrade between Manchester and York. The Northern Endurance Partnership has signed a seabed lease for the UK’s first commercial-scale CCS project targeting 2028 operations, while 10 green hydrogen schemes under HAR1 progress to construction and HAR3 in 2026 earmarks £500m for infrastructure and potential repurposing of 1,500 miles of gas pipeline. With PPP models tipped for a resurgence, civils, rail, offshore and industrial contractors face a multi-year opportunity set, but will also need to manage delivery risk and emerging hydrogen and CCS technical standards. (Source: Construction Wave, IOM3)
🌱 Hamburg Declaration and CfD AR7 anchor long-term offshore build-out
On 26 January 2026 the UK signed the Hamburg Declaration with Germany, Belgium, Denmark and the Netherlands, committing to coordinated offshore grid development, joint wind farm planning and hybrid interconnectors to advance offshore wind and hydrogen ambitions. In parallel, Offshore Wind Allocation Round 7 has awarded CfDs to 8.4GW of projects, and grid connection reforms due in 2026 will prioritise project readiness and flexibility to support the Clean Power 2030 plan, which requires over £100bn of investment by 2030. Nuclear policy is being framed around final approvals for Small Modular Reactors and a 22GW baseload target by 2050. This combination of regional agreements, CfD support and system reform signals a durable pipeline of offshore and grid work, but also raises the bar for developers and contractors on cross-border coordination and grid integration. (Source: GOV.UK, Forvis Mazars)
Also in the news
🏗️ Rents are forecast to rise 2% in 2026 amid ongoing shortages, with two-thirds of landlords still planning to invest in the PRS despite tax and regulatory concerns. (Source: Greenberg Traurig)
🏗️ The Building Safety Levy due from October 2026 on residential schemes of 10+ units is emerging as a key viability pressure point for BTR, student and senior living projects. (Source: Greenberg Traurig)
🏛️ Business rates reform consultation and leasehold reform are progressing without an imminent ban on leasehold flat sales, leaving some investor uncertainty unresolved into 2026. (Source: Greenberg Traurig)
🏛️ No new planning or infrastructure strategy announcements were made on 26–27 January, with government communications instead focusing on areas such as the National Data Library and defence SME support. (Source: GOV.UK, Conservative Home)
🌱 PPP models are being re-examined as a potential route to finance the next wave of UK infrastructure, including energy transition assets and transport upgrades. (Source: Construction Wave)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline, from boardrooms to site offices. If this briefing is useful, consider forwarding it to a colleague before their 9 a.m. meeting.