At a Glance
UK construction ended 2025 with rising sub-£100m project starts but an overall contraction in work as residential output slumped and investment decisions slipped.
Construction insolvencies ticked up again in 2025, with December seeing the highest number of administrations since 2022 and fragile firms exposed to cashflow pressures.
Housebuilding completions remain far below the 300,000-homes-a-year target, with early 2025 output at its weakest Q1 level since 2014 and London approvals under strain.
Major investment pipelines in energy, water and roads point to significant 2026–2031 opportunity, led by AMP8, a new £24bn roads strategy and an £80bn energy programme.
Planning reform, building safety regulation and slow resourcing of planning officers continue to weigh on delivery even as lower interest rates underpin cautious optimism for Q1 2026.
Today’s update: end‑of‑year data confirms a two‑speed market, with non‑residential schemes gaining momentum while housing stutters against policy, planning and financing headwinds. At the same time, a substantial infrastructure and energy pipeline is forming just as insolvency risks, regulatory complexity and planning capacity constraints resurface. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of insolvency pressures and offsite contractor failures, new 2025 figures show 286 construction insolvencies for the year and 20 administrations in December alone, underlining persistent fragility as the sector enters 2026. (Source: Lancashire Business View)
Building on recent scrutiny of planning reform and the Building Safety Act, today’s analysis highlights how these regimes are still slowing delivery and adding cost, with government commitments to boost planning officer numbers yet to translate into meaningful capacity on the ground. (Source: Pinsent Masons)
Returning to the theme of pipeline resilience, new commentary sets out a forward view of £80bn energy, £50bn+ water (AMP8) and £24bn highways programmes, sharpening the contrast between strong long‑term demand and current market uncertainty. (Source: Pinsent Masons)
Top 5 Headlines
💰 Construction ends 2025 with sub‑£100m project starts up, but overall workload down
The January 2026 Construction Index shows UK project starts under £100m rose 7% in Q4 2025, though levels remain below 2024. Non‑residential sectors such as office and industrial grew 14% over the previous three months, while residential starts fell 2% in the quarter and 20% year‑on‑year. Overall construction work contracted as weak client confidence and delayed post‑Budget investment outweighed pockets of growth, signalling a cautious start to 2026 pipelines. (Source: PBC Today)
💰 Construction insolvencies climb again, with December 2025 the worst since 2022
New data shows 20 construction company administrations in December 2025, the highest monthly level since 2022. Across the full year, there were 286 insolvencies, marginally above 282 in 2024 but still below the 363 recorded in 2023. Returning today as an ongoing concern, these figures confirm that while the rate of failures has eased from its 2023 peak, financial resilience remains thin and contractors face heightened cashflow risk into early 2026. (Source: Lancashire Business View)
🏗️ Housing completions lag far behind 300,000‑a‑year target
A new sector report confirms 185,000 homes were completed in 2024, down from 195,000 in 2023 and well short of the government’s 300,000‑unit annual goal. Q1 2025 saw around 39,000 new homes completed – the weakest first quarter since 2014 – with London housing approvals falling sharply amid concerns that constrained transport infrastructure is limiting development capacity. The shortfall underscores the gap between policy ambition and deliverable schemes, increasing pressure on planning, infrastructure investment and housing delivery models. (Source: Tokio Marine HCC)
🚆🌱 £80bn energy pipeline and £50bn+ AMP8 works set out 2026–2031 opportunity
Legal and industry analysis highlights an £80bn energy project pipeline over the next eight years, spanning onshore wind, battery storage and small modular reactors, alongside more than £50bn of capital works in the water sector’s AMP8 period (2025–2030). National Highways’ third Road Investment Strategy (2026–2031) is due to launch with £24bn of funding, adding major highways schemes to the mix. Returning to the pipeline resilience theme, this emerging programme points to sustained demand for civils, energy and utilities contractors despite short‑term market volatility. (Source: Pinsent Masons)
🏛️ Regulatory drag persists as planning and building safety changes bed in
Commentary on the 2026 outlook stresses that planning reform and implementation of the Building Safety Act are still slowing project delivery and adding cost and complexity. While government has committed to expanding the number of planning officers, progress is reported as slow, leaving many authorities with constrained capacity. The persistence of these bottlenecks means developers and contractors must continue to factor extended pre‑construction timelines and additional compliance effort into bids and programme planning. (Source: Pinsent Masons)
Also in the news
💰 Market forecasters describe Q1 2026 as “cautiously optimistic”, with lower interest rates and a settled Budget expected to support activity, but seasonal cashflow pressures may trigger further contractor insolvencies. (Source: Lancashire Business View)
🏗️ Analysis of recent housing trends highlights that weak residential starts at the end of 2025 follow a 20% year‑on‑year fall, reinforcing concerns that the housing downturn could dampen wider construction output into mid‑2026. (Source: PBC Today)
🏗️ The same housing sector report warns that London’s sharp drop in approvals, partly linked to infrastructure constraints, could jeopardise the capital’s contribution to national housing targets. (Source: Tokio Marine HCC)
🚆 A recent meeting of the Northern Ireland Committee for Infrastructure reviewed oversight of infrastructure delivery, including active travel programmes and audit findings, signalling continued scrutiny of value and governance. (Source: YouTube)
🏛️ Sector commentary notes that without faster implementation of planning reforms and clearer building safety processes, the benefits of the emerging infrastructure and energy pipeline may be delayed. (Source: Pinsent Masons)
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 colleagues who are planning bids, investments or delivery strategies for 2026.