Glenigan’s latest report found that project starts have stabilised since the election in July, and private sector work has gradually risen during the second half of this year.

Although Glenigan predicts only a modest 1% performance dip for 2024 by the year’s end, it’s an improvement against the 7% drop in 2023.

Firm development pipelines are pulling through, with main contract awards rising 7% above the figures in 2023.

As market optimism and purchasing appetite returns, Glenigan forecasts that housing starts should start to increase with a 13% rise in 2025 and 15% increase in 2026 as housebuilders respond to improved consumer confidence and strengthening property transactions.

While housing approvals have been on a downward trend for most of 2024, government planning reforms are anticipated to reverse this trend.

Glenigan says this will pave the way for an uptick in new approvals and housing developments over the forecast period.

It also says the chancellor’s £3bn support package for SMEs and the build-to-rent sector announced in the Autumn Budget, should provide a boost to new and smaller developers.

Glenigan economic director Allan Wilen says: “The construction sector is on track for growth from 2025, fuelled by a combination of improved consumer confidence, increased household spending, and strategic fiscal changes announced in the recent Budget.”

“These factors will drive demand in private housebuilding, as potential buyers will feel they have greater purchasing power. In turn, this will be passed onto property developers and investors, prompting a likely uptick in supply.”