UK Governments reveals their investment strategy for the construction industry over the next 10 years
This Investment Strategy from the government will be seen as a positive step for the construction industry as the ONS reported in May 2025 a decrease of 0.6% in construction output following 3 month of continues growth.
However the Government is yet to confirm how this investment Strategy will be spent and when.
Furthermore this investment strategy will hopefully support the Governments ambitious Target of achieving 1.5 million homes in 5 years. As the first year has resulted in only 186,000 new homes being completed. This is significantly behind the 300,000 per year new homes required to be completed to achieve the targets.
One of the continuing concerns in the residential construction industry is achieving BSR approval.
Since the process has begun only 10.7% of new build high risk buildings have successfully passed gateway 2.
Officials have confirmed that it takes an application 36 weeks on average to secure gateway approval, which is significantly longer than the 12 weeks it is meant to.
As a result the Government has taken control of the Building Safety Regulator off of the HSE and given it to the Housing Ministry.
As part of this they are also Increasing the staff by 100 people including in house engineers and building inspectors with the aim to help clear the back log.
UK interest rates have maintained the current rate of 4.25% in June 2025.
It is anticipated that the interest rates will continue to fall, however with the recent increase in inflation sooner than expected this may complicate the decision to reduce the interest rates.
However, UK unemployment rates have increased to a 4 year high of 4.7%, but wage growth has slowed down to 5.0%. This combination gives the Bank of England the opportunity to lower the interest rates.
Consumer Price Index shows that the inflation rate remains above the Target 2% at 3.6% in June 2025.
The inflation rate is at an 18 month high due to current conflicts keeping fuel prices up and food prices increasing.
This inflation rate is increasing faster than predicted and as a result it might exceed the predicted 2025 inflation rate high of 3.7%.
A comparison of published TPI data for 2025 and beyond highlights a wider range of viewpoints on the market’s potential direction.
Dalbergia forecasts TPI at 3.0% for 2025, with rates gradually decreasing over the next three years.
