Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
Housebuilding Downturn Slows as UK Construction Activity Improves
The downturn in UK housebuilding eased in July, according to the latest S&P Global construction survey. The housebuilding index within the S&P Global UK Construction Purchasing Managers’ Index (PMI) rose to 41.8 from 35.9 in June, marking the slowest decline in housebuilding since October 2025.
The wider construction PMI also improved, rising to 44.7 from 38.4 in June. Both readings remain below the 50 mark, which indicates that construction activity is still contracting, but at a slower pace than in previous months. The sector had experienced nine consecutive months with the housebuilding index below 40 prior to July.
S&P Global reported that the figures suggest the construction sector has begun to stabilise after a sharp downturn during the second quarter. The index measuring new orders reached its highest level since September 2025, though it still indicated falling workloads. Employment in the sector declined for the 19th consecutive month, but at the slowest rate since February. Business expectations also improved to their strongest level since February.
Industry commentators noted that significant challenges remain for a full recovery in housebuilding. Affordability constraints, planning delays, and fragile buyer confidence were highlighted as ongoing pressures on the sector. There were also references to deep structural issues in the property market, with economic uncertainty and affordability pressures causing many prospective buyers to delay moving. Developers remain cautious about bringing forward new sites while demand is uncertain.
Calls were made for greater clarity around housing funding and the barriers facing development, including planning, design, and procurement. It was also noted that the speed and certainty of property transactions could support housing supply, as slow and unpredictable transactions can reduce confidence across the housing market.
For letting agents and inventory clerks, these trends may signal continued caution in the residential property market, with ongoing challenges in new housing supply and transaction volumes.
Source: Property Industry Eye