CPA Construction Industry Forecast Report Summer 2025
After the last few years, you’d forgive anyone in the housebuilding sector for being cautious about future prospects. And the Construction Products Association’s latest forecasts for the sector, released last week, back that up – cautious optimism.
While risks and uncertainties have undoubtedly increased, we are happy to see positive signs that house builder activity continues to recover gradually. Our experience mirrors the CPA’s assessment in that we saw an uptick in June and early July after a dip in May.
Private housing output is expected to rise by 4.0% in 2025 and 7.0% in 2026, according to the by the CPA’s latest forecasts – although it does highlight several reasons for caution, although the drive to reduce interest rates may mitigate some of the demand issues.
As a key supplier to the housebuilding sector, what are our concerns?
- First Time Buyer Support Programme: The glaring omission in government policy is the lack of a replacement for the now-defunct help to buy programme to stimulate first time buyer demand. The HBF estimate that “a further 100,000 homes could be unlocked if a first-time buyer support scheme were to be introduced.” (Source: https://www.hbf.co.uk/research-insight/gov-progress/)
- Nutrient and Water Neutrality: Believed to be holding up around 180,000 new homes, with many additional schemes also held up by wastewater connection issues and electricity grid capacity constraints.
- The proposed Building Safety Levy: would impose an additional £3.4 billion in costs according to the HBF. “The decision to proceed with the levy without a full impact assessment will disproportionately affect SME builders and undermine the delivery of affordable homes.”
- Section 106 Homes: HBF report that “more than 100,000 private homes and at least 17,000 affordable homes are currently stalled due to a lack of Registered Provider bids for Section 106 homes.”
- Economy: Economic growth prospects are hard to call at the moment. We do not believe we have yet seen the full impact of employment taxes on businesses or the rise in national minimum wage. If this drives a further increase in unemployment, there is likely to be a negative impact on consumer confidence around larger financial commitments like housing.
Cautiously Positive
We are, of course, delighted that the forecasts for our sector are in the positive at last, albeit from an extremely low base. Our teams have been working throughout to build market share, so we’re looking forward to building on that progress as the sector cautiously moves back into growth, in the hope that the Government takes heed of housebuilders’ concerns to reinforce this small progress.
James Scott
MD
