At a Glance
UK construction faces a sharp April contraction with PMI at 39.7, even as forecasters still see modest 2026 growth driven by infrastructure and energy.
The sector is under structural strain, combining a 266,000-worker shortfall with construction accounting for 17% of UK insolvencies.
The phased rollout of the Renters’ Rights Act 2025 and wider planning reforms will reshape residential returns and developer obligations from this month onward.
The 10-Year Infrastructure Strategy and NISTA promise faster delivery and up to 150 fast-tracked schemes, alongside new regulatory powers over heat and water.
Net-zero pathways depend increasingly on renewables and emerging technologies, with wave energy targets and CfD reforms expanding the generation pipeline.
Today’s update: early-2026 data show a construction market caught between cyclical weakness and a structurally expanding workload in infrastructure and clean energy. At the same time, Westminster is tightening the policy and regulatory framework around housing, planning, utilities and green power. Here’s what you need to know to stay ahead today.
Ongoing Stories
🏛️ Returning to the renters’ rights agenda flagged in recent issues, today’s update confirms the phased rollout of the Renters’ Rights Act 2025 from May 2026, with specific implications for build-to-rent and student accommodation operators as new obligations start to bite. (Source: Osborne Clarke)
🏛️ Following earlier coverage of planning and infrastructure reforms, government is now proposing to streamline NSIPs further by removing some pre-application consultation requirements and consulting on sanctions for slow build-out, signalling a harder edge to delivery expectations. (Source: Boyer Planning)
Top 5 Headlines
⚙️ Construction outlook mixes modest 2026 growth with deep short-term slump
UK construction output is forecast to grow by around 2.8%–4.5% in 2026, led by infrastructure and energy work, while housing is expected to grow more slowly at about 4%. This sits against an April 2026 S&P Global UK Construction PMI reading of 39.7, the lowest in over a year and firmly in contraction territory, reflecting falling output and rising cost pressures. With construction also responsible for 17% of UK business insolvencies year-on-year, delivery risk and pricing on live and upcoming tenders will remain acute despite the medium-term pipeline. (Sources: RoofersCoffeeShop, Tokio Marine HCC, S&P Global PMI)
⚙️ Sector needs 266,000 extra workers amid fragile early-2026 recovery signs
Forecasts indicate construction will require around 266,000 additional workers to meet expected demand, adding to existing skills and capacity gaps. Glenigan data suggests a fragile recovery, with quarter-on-quarter increases in planning approvals, contract awards and project starts, though volumes remain below last year’s levels. Labour scarcity combined with only tentative demand growth will heighten competition for skills, driving costs and constraining the sector’s ability to capitalise on the emerging pipeline. (Sources: RoofersCoffeeShop, Glenigan)
🏛️ Renters’ Rights Act rollout and tax changes reset residential investment maths
The phased implementation of the Renters’ Rights Act 2025 begins in May 2026, changing the rights and responsibilities landscape for landlords, tenants and letting agents, particularly in build-to-rent and student accommodation. Government is also consulting on using planning powers to push up build-out rates, potentially allowing local authorities to refuse permissions to developers deemed too slow, while a 2% increase in tax on rental income above standard rates is scheduled from April 2027. Residential investors and developers will need to reassess project viability, holding strategies and planning risk as these measures reshape returns and delivery obligations. (Source: Osborne Clarke)
🚆 NISTA and 10-Year Infrastructure Strategy aim to centralise delivery
The UK’s 10-Year Infrastructure Strategy proposes creating the National Infrastructure and Service Transformation Authority (NISTA) to centralise infrastructure policy and delivery oversight. The strategy targets major planning reforms and the fast-tracking of up to 150 planning decisions for significant projects within the current parliamentary term. For sponsors and contractors, a more centralised regime could compress programme timelines but will require careful alignment with new approval pathways and governance expectations. (Source: UK Government – 10-Year Infrastructure Strategy)
🌱 Wave energy targets and CfD reforms widen net-zero delivery options
A LUT University study finds the UK may need 27 GW of wave energy by 2050 under net-zero scenarios, with interim ambitions of 300 MW of wave capacity by 2035. Alongside this, government is progressing reforms to the Contracts for Difference scheme, including longer contract terms for wind and solar and reintroducing onshore wind into the NSIP regime, while the approval pipeline for solar PV and wind is near record levels. These moves broaden the technology mix and revenue frameworks available to developers, strengthening the long-term pipeline for grid, marine and onshore/offshore delivery teams. (Sources: Renewable Energy World, EdenSeven, Slaughter and May)
Also in the news
🚆 The government plans to fast-track up to 150 planning decisions for major infrastructure schemes this parliamentary term, aiming to reduce bottlenecks in nationally significant projects. (Source: UK Government – 10-Year Infrastructure Strategy)
🏛️ Continuing the planning reform theme, proposals to remove some NSIP pre-application consultation requirements are intended to streamline early-stage processes and cut lead times. (Source: Boyer Planning)
🏛️ A government response is expected shortly on water sector regulation, including the potential merger of Ofwat into a single water regulator for England, which would reshape oversight for water infrastructure investors and operators. (Source: Slaughter and May)
🌱 Ofgem has been regulating heat networks in Great Britain since January 2026, bringing new consumer protection and technical standards that heat network developers and operators must now integrate into project designs and contracts. (Source: Slaughter and May)
💰 The FCA’s May 2026 Regulatory Initiatives Grid highlights ongoing work on infrastructure-relevant finance rules, including UK EMIR updates and settlement reforms that could affect how large projects are funded and traded. (Source: FCA Regulatory Initiatives Grid)
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 programmes this week.