UK construction: Housebuilding to ramp up in 2025 despite labour challenges

Kelly Boorman, national head of construction and partner at RSM UK, comments: “There’s reason to be positive about the outlook for construction in 2025, with our latest Quarterly Economic Outlook indicating that government spending set to accelerate economic growth to almost 2% in 2025. This should support increased investment in infrastructure and housebuilding, despite the risk of stalled interest rates and growth adding further tension to the already fragile supply chain.

“In addition, mortgage approvals also increased by 3.3% in November, a strong sign that housing demand is picking up as we enter Q1 2025. The publication of the National Planning Policy Framework is also significant, with industry urging government to speed up processes and remove red tape for years. While these messages are encouraging, there are still challenges to overcome. The practicalities of people, skills and geographical location require time to be developed, especially as the framework is focused on community-led development with devolved powers to local planning authorities. As it stands, the planning system is not fit for purpose to accelerate housebuilding. Areas where there is the most need for new and affordable homes do not have the regional workforce in place to deliver increase volumes which will delay the effects of the new planning framework targets. 

She added: “There is also the risk that greenbelt land will come under threat, as land that will enable high volume builds to meet local planning targets. There could become a tension between meeting targets and prioritising the repurposing of alternative grey belt and brownfield sites. Government needs to incentivise developers to utilise these areas, even though they may be less appealing. Moving into 2025, construction businesses need practical government support which equips them with the right people, skills and technology to genuinely deliver on housing targets in the right areas, prioritising sustainable developments and economic growth.”