At a glance
UK construction output is forecast to return to growth in 2026, but with tender prices rising faster than general inflation.
A £200bn-plus infrastructure and energy pipeline is consolidating around a handful of megaprojects under a new 10-year strategy.
Government is tightening the regulatory net around building safety, products and net zero-readiness ahead of 2026–27 go-live dates.
Housing and social infrastructure are stabilising on the back of easing interest rates and long-term affordable homes funding.
New legal and regulatory tools are being deployed to speed up NSIP delivery and strengthen remediation and product safety claims.
Today’s update: the 2026 outlook now points to modest construction output growth underpinned by infrastructure, energy and industrial work, but with rising tender prices and a still-weak commercial sector. At the same time, government is locking in a tougher building safety and product regime, and reshaping infrastructure law and housing standards around net zero and resilience. Here’s what you need to know to stay ahead today.
Ongoing Stories
🏛️ Following earlier coverage of planning and infrastructure reform, the government’s wider 2026 rulebook is coming into focus, with the Building Safety Levy, Future Homes Standard and new biodiversity and construction products regimes all now fixed on the sector’s near-term horizon. (Sources: GOV.UK, PBC Today)
🚆 Returning to the theme of faster infrastructure delivery, the Planning and Infrastructure Act 2025 is now backed by judicial review reforms designed to compress NSIP challenge timetables and reduce delay risk on major schemes. (Source: Freshfields)
⚙️ Building on previous construction law developments, courts have now confirmed that assignees can pursue adjudication even where contracts are silent, strengthening the hand of those seeking remediation from complex developer and supply-chain structures. (Source: Osborne Clarke)
Top 5 Headlines
💰 Construction output to grow 2.8% in 2026 as inflation in tenders persists
UK construction output is forecast to expand by around 2.8% in 2026, led by infrastructure and industrial work, after a 1.1% decline in the three months to November 2025 and a weak 2025 overall. Tender prices are expected to rise 3.5% in 2026 and by 17% over five years, while commercial construction remains nearly 30% below pre-pandemic levels despite a slight uptick expected next year. This combination of volume recovery and cost inflation will sharpen focus on procurement strategy, risk pricing and value engineering for both public and private clients. (Sources: Thomson Gray, Tricel Water UK, ONS)
🚆 £725bn 10-year infrastructure strategy underpins £200bn+ live pipeline
A refreshed national infrastructure pipeline valued at over £200bn for 2026 is being driven by megaprojects including the Lower Thames Crossing (c.£10bn), HS2 (with £25.3bn of government funding earmarked for 2026–30), Sizewell C, Rampion 2 offshore wind (1.2GW) and the 400MW Kincardine Grid Services Complex. These sit within a wider 10-Year Infrastructure Strategy allocating £725bn, with commitments to streamlined planning and digitised, AI-enabled approvals processes. For contractors, consultants and investors, this consolidates a long-term workflow but raises the stakes on delivery capability, digital readiness and supply-chain resilience. (Sources: Freshfields, Barbour ABI, AECOM)
🏛️ New 2026–27 construction rules tighten safety, products and net zero standards
From October 2026 the Building Safety Levy is set to raise up to £3.5bn over ten years for high‑risk building remediation, while the Future Homes Standard from late 2026/early 2027 will require all new homes to be net zero‑ready without gas boilers. Biodiversity Net Gain rules will extend to Nationally Significant Infrastructure Projects from May 2026, alongside a Construction Products Reform White Paper and a consultation on a General Safety Requirement for currently unregulated products, closing 20 May 2026. Together with progress highlighted in the latest Grenfell Tower Inquiry annual report, this signals a materially tougher safety and compliance environment that developers, manufacturers and contractors must now programme into designs, costs and governance. (Sources: GOV.UK, GOV.UK, PBC Today)
🏗️ Housing and development stabilise as rates ease and standards rise
The UK housing market is showing early‑2026 momentum with 6% more homes listed year-on-year, while forecasts for 2026 house price growth remain modest at around 1–4%, with relative strength expected in the West Midlands, North West and Wales. A £39bn Social and Affordable Homes Programme aims to deliver about 300,000 affordable homes by 2036, alongside new minimum energy efficiency and tenant safety standards for social housing that took effect in January 2026 and an expected fall in Bank of England base rates from 3.75% to around 3.25%. For developers, registered providers and investors, this suggests a gradually improving transaction environment but with tighter quality and compliance benchmarks for new and existing stock. (Sources: Karbon Homes, Planning Portal, MoneyWeek)
🌱 Energy, heat and grid reforms reshape low‑carbon delivery risk
New minimum energy standards for homes under the Energy Performance of Buildings reforms, alongside updated technical and safety standards for heat networks and hydrogen, are tightening the framework for low‑carbon schemes from 2026 onwards. The latest Contracts for Difference allocation round has awarded 6.2GW of renewable capacity, while Ofgem is pressing for demand connection reforms to ease grid bottlenecks as liability, connection and investment risks for renewables gain prominence. Developers and funders in energy and large estates will need to adjust design choices, delivery models and risk allocation to align with the evolving regulatory and grid landscape. (Sources: Osborne Clarke, Thomson Gray)
Also in the news
🚆 The Planning and Infrastructure Act 2025’s judicial review reforms are intended to speed up challenges for Nationally Significant Infrastructure Projects, potentially reducing delay risk on schemes in the new £725bn strategy. (Source: Freshfields)
⚙️ Courts’ confirmation that assignees can adjudicate in the absence of explicit contract rights is expected to support more robust remediation strategies where liabilities sit across complex developer and SPV structures. (Source: Osborne Clarke)
🏛️ The Construction Products Reform White Paper proposes phased regulatory changes and greater transparency in third‑party certification, signalling a more interventionist stance on product performance and data. (Source: GOV.UK)
🏗️ The latest Grenfell Tower Inquiry government annual report confirms progress on the new Building Safety Regulator, dutyholder regimes and a licensing framework for principal contractors on high‑risk projects. (Source: GOV.UK)
🌱 Commentary on renewables highlights growing concern over liability allocation and grid access, even as new CfD awards and evolving hydrogen standards expand the low‑carbon project pipeline. (Source: Osborne Clarke)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline. If this briefing is useful, consider forwarding it to colleagues ahead of their next bid review or investment committee.