Residential construction starts down 15% on quarter

Residential construction starts down 15% on quarter


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 by more than a third compared to same time last year

Residential construction starts fell sharply in the three months to the end of August, down 15% from the preceding three months and 36% compared with the previous year.

The poor performance of residential formed part of a wider 2% decline in the value of underlying work (under £100 million) starting on-site during the three months to the end of August and a 20% fall compared to last year’s levels.

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The figures, from Glenigan’s September 2026 edition of its Construction Index, show that residential remains the sector’s biggest laggard, said Glenigan. It said that in the private sphere, developers are reviewing the viability of sites in response to weak house sales and higher construction costs, including the impending building safety levy. The private housing sector declined 8% against the preceding three months and 37% lower than a year ago.

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Meanwhile, social housing dropped 29% against the preceding three months and 30% on the previous year.

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Non-residential continues to grow

However, non-residential continues to grow, with office starts, industrial and health showing encouraging uplifts.

Glenigan’s Allan Willen said: “After a rough start to the year, it’s fair to say the sector caught its breath over the summer and, whilst activity levels remain painfully low, they have stabilised. It’s a positive sign that the freefall, which began in Q2 has finally ground to a halt. That said, we’re not exactly climbing yet.

“The real bright spot is non-residential. Meanwhile, residential remains a drag on overall activity, as developers weigh up site viability against higher construction costs and the looming building safety levy.”

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