15 May, 2026/ by Surveyor Local /News
Construction output is at its lowest since the Covid lockdowns. Here's what the latest RICS figures mean if you're planning to buy.
One of the problems facing the country is the lack of housing for many people, whether they are seasoned homebuyers or doing it for the first time. And there is a paucity of affordable housing available for those on a low income.
It is for this reason that, as part of their election manifesto, the Labour Government promised to build 1.5 million homes during the course of the current Parliament, prior to 2029 when the electorate are next expected to go to the polls.
What the figures show
Every three months, the Royal Institution of Chartered Surveyors (RICS) publishes its UK Construction Monitor Report, which analyses how the construction industry is performing and compares it with earlier periods. The latest report for the first quarter of 2026 shows that the construction sector experienced a soft start, with workloads declining across the period and forward-looking sentiment weakening.
The headline workloads indicator fell to a net balance of -12%, down from -6% in the previous quarter — the weakest reading since Q2 2020, when Covid lockdowns shut building sites across the country. Private housing fared particularly badly, dropping to -19%, a figure that will concern anyone watching the government's housebuilding ambitions closely.
What's driving the slowdown
The principal driver behind the poorer figures is increased costs of materials, which make the construction process more expensive and put off future investment. There has also been a reticence to lend money for larger construction projects, significantly reducing the funds available for borrowing.
Costs have taken a real hit in large part due to the increase in fuel costs as a direct result of the ongoing conflict in the Middle East.
There is, however, more encouraging news for those employed in the construction industry, with employment expectations remaining quite high, although this too has weakened slightly from the previous quarter.
RICS Chief Economist Simon Rubinsohn said of the report's findings:
"The impact of the war in the Middle East is clearly visible in the Q1 RICS Construction Monitor.
Rising material costs, a tougher credit environment and increased pressure on margins are already leading some developers to slow construction activity.
More significantly, plans for the next twelve months are being scaled back most notably in the private sector.
Expectations around housebuilding are now flat which aligns with the comments from leading housebuilders in their recent trading updates and results statements.
Alongside the tougher financial environment, concerns continue to be raised around the challenges thrown up in the planning process and the ongoing impact of the Building Safety Regulator (BSR).
Even with the passage of the Planning and Infrastructure Act and the improved performance of the BSR, it is evident that both these factors remain significant impediments for developers."
What this means if you're buying a property
Whether you are looking to buy a new build or an older home, it is always wise to think carefully about the condition of the property — a suitable survey will tell you what you are looking at financially for any remedial work on an existing property, and give you a qualified assessment of build quality on a new one.
Surveyor Local will connect you to the best professional advice through our nationwide panel of chartered surveyors, all of whom are members of RICS. We only work with RICS members, ensuring every survey is professionally delivered.
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