Construction, confidence and the cost of uncertainty
Three publications this week tell a consistent story: the UK property and construction market is under pressure from elevated borrowing costs, geopolitical uncertainty and weakening demand.
Construction output falls at fastest pace for six years
The S&P Global UK Construction PMI fell to 38.2 in May, down from 39.7 in April, the seventeenth consecutive month below the 50 neutral threshold. Setting aside the pandemic, it was the steepest contraction since March 2009. Residential activity was the weakest segment at 36.0, reflecting elevated borrowing costs and unfavourable market conditions. Input price inflation accelerated to its fastest pace since June 2022, driven by fuel surcharges and rising energy costs, while supplier delivery times lengthened for the third consecutive month.
House prices broadly flat as uncertainty weighs
Nationwide recorded annual house price growth of 1.7% in May, down from 3.0% in April, with prices falling 0.6% month on month, the first monthly decline of 2026. Halifax reported a similar picture, with average prices edging down 0.1% to £298,806 and annual growth of 0.5%. Both indices point to the same headwinds: higher energy costs, elevated market rates and weaker confidence.
One bright spot
Bank of England figures showed mortgage approvals rose 3.1% in April to 65,945, the highest since January 2025 and 9% above April 2025. Both Nationwide and Halifax struck a cautiously optimistic note, suggesting that if the Middle East shock proves short-lived and energy prices normalise in the quarters ahead, any near-term softening in the housing market could also prove temporary.
Greystar closes Europe’s largest residential fund
Greystar has closed GEPE II above its €2bn target with €2.7bn of commitments. It is the largest pan-European value-add residential fund raised to date. Capital came from sovereign wealth funds and pension institutions across Europe, North America, the Middle East and Asia-Pacific. The fund provides €6.8bn of total investment capacity for deployment across multifamily and student accommodation in key European markets.
EQT acquires Tritax Big Box portfolio for £199m
Tritax Big Box has sold six logistics assets to EQT Real Estate for £199m in line with book value, generating £12m of contracted annual rent. Proceeds will be recycled into development-led logistics and assets targeting yields on costs of 6-8% and data centre projects targeting 9-11%.
Investors pivot to infrastructure as energy security rises up the agenda
A Knight Frank survey finds that 24% of real estate investors by number, and more than a third by AUM, have or expect to have infrastructure exposure by end of 2026, driven by energy security, digital acceleration and the search for resilient income. Unlisted infrastructure funds raised a record $289bn in 2025, with UK data centre electricity demand forecast to rise 160% by 2030 accelerating the convergence of real estate and infrastructure capital.
For a deeper look at the structural forces driving this shift, see our Long View on the data centre boom in Issue No. Four.
Quintain secures £188.8m government-backed loan for Wembley BTR
Quintain has secured a £188.8m loan under the government’s Private Rented Sector Guarantee Scheme to support the stabilisation of Luna and Solar, two recently completed BTR assets comprising 665 homes at Wembley Park. The loan, priced at 50 basis points over SONIA, attracted an orderbook 3.5 times covered, with Venn retaining £1.5bn of further lending capacity under the scheme.
Labour’s housing programme: two years on
Labour’s plans for housing reform in 2024 were ambitious. Two years on from their general election victory, how are they faring? In this edition of The Long View, we revisit the manifesto commitments, the progress made and the challenges that remain. This is not a judgement on the merits of Labour’s housing programme. It is a progress report: what has been promised, what has been implemented and where the key delivery questions now lie.
The housing programme was one of the most ambitious elements of Labour’s 2024 manifesto. The promise of 1.5 million homes captured the headlines, but the programme extended far beyond a single target. Planning reform, affordable housing investment, new towns, renters’ rights and leasehold reform formed part of a broader attempt to reshape the housing sector. Two years later, much of the policy architecture is beginning to take shape. Some of the harder questions are now around delivery.
What they promised
It is worth remembering the scale of the commitments. The headline pledge was 1.5 million new homes over the parliament. To get there, Labour promised to reform the National Planning Policy Framework to restore mandatory housing targets that had become advisory under the Conservatives. They promised a brownfield-first approach to development, and reforms to compulsory purchase rules to make land assembly cheaper and faster. They also proposed funding 300 additional planning officers to help accelerate decision-making in local authorities struggling with capacity.
Beyond incremental reform came the promise of a generation of new towns, harking back to the development of new urban settlements after the Second World War. Labour also promised new cross-boundary strategic planning mechanisms to ensure that housing need could be planned at a regional scale, requiring Combined and Mayoral Authorities to coordinate housing growth across their areas.
On affordability, Labour pledged a significant increase in social and affordable housebuilding, a permanent mortgage guarantee scheme, and first refusal for first-time buyers ahead of international investors. For renters, Section 21 no-fault evictions would be abolished and Awaab’s Law, requiring landlords to fix damp and mould within specified timeframes, extended from social to private housing.
Finally, Labour committed to ending the leasehold system: banning new leasehold flats, making commonhold the default, and enacting the Law Commission’s proposals on lease extension and freehold acquisition, amongst other things. Taken together, it was a programme that touched almost every part of the housing market. The question was always whether that ambition would survive contact with delivery.
Policy and legal architecture
From a policy and legal perspective, Labour has followed through on many of these commitments. The NPPF was updated within months of taking office, reinstating mandatory housing targets and introducing the grey belt framework. The Planning and Infrastructure Act 2025 passed through parliament in December, giving the government powers to accelerate infrastructure delivery and streamline major development. The Renters’ Rights Act abolished Section 21 evictions. A £39 billion ten-year Affordable Homes Programme was launched. Leasehold reform has progressed, with the two-year ownership rule for lease extensions removed and commonhold confirmed as the future default for new-build flats. The New Towns Draft Programme identified seven sites across England for large-scale development.
Practical delivery
The delivery picture requires some context. To meet the 1.5 million homes target, the government needs to deliver 300,000 net additional homes per year across the parliament. Between July 2024 and March 2026, an estimated 342,100 homes were added to England’s housing stock, representing around 23% of the total target despite roughly two-fifths of the parliament having elapsed. Annual completions stood at 208,600 in 2024/25.
Government modelling published in March 2026 projects completions rising from 181,000 in 2026 to 270,000 by 2029, a trajectory that, combined with delivery to date, would likely fall short of the 1.5 million target. That headline target looks potentially out of reach. Whether that obscures genuine progress on delivery is a harder question.
What’s yet to come
Several of the programme’s most ambitious reforms have yet to move from policy into delivery. The new towns programme remains at consultation stage, with seven sites identified but no material construction underway. Leasehold reform is still a work in progress: the Commonhold and Leasehold Reform Bill is still to become law, the ground rent cap has yet to be implemented, and the new legislative provisions have therefore yet to be tested in practice. Cross-boundary strategic planning mechanisms have not yet been rolled out. The status of the proposed first-time buyer priority over international investors is less clear. And while planning reform is working its way through the system, the impact on completions is likely to lag by years not months, meaning many of the benefits may not materialise before the end of the current parliament.
The scorecard so far
Two years in, Labour has made genuine progress on the legislative and policy framework for housing reform. The pace of legislation has been notable, and several long-delayed reforms, on renters’ rights, leasehold and planning, are now moving through the system.
The harder question is what that framework will produce in practice. The structural constraints on housing delivery and materials costs owing to geopolitical uncertainty as well as grid connection timelines present meaningful obstacles to delivery. Planning reforms take years to feed through into completions. And local political dynamics are already testing the programme’s ambitions: Enfield Council’s withdrawal from the new towns programme in May 2026, following a change of administration after local elections, is an early reminder that delivery at scale depends not just on national policy but on sustained political will at every level of government.
Housing delivery operates with long lead times and any definitive judgement at the two-year mark would be premature. The legislative groundwork is in place. Whether it translates into homes at the scale and speed promised remains the central and as yet unanswered question of Labour’s housing programme.
Starmer backs mayors to override local resistance on new towns
Following Enfield Council’s withdrawal from the Crews Hill and Chase Park new town scheme, the Prime Minister convened mayors from across England to signal that new town decisions will be taken in the national interest. The government confirmed it will back mayors to intervene in stalled schemes using powers under the English Devolution and Community Empowerment Act, with discussions also underway to bring Moorgate to Welwyn Garden City rail services under Transport for London control to support connectivity to the Crews Hill site.
The Early Viewer provides news, analysis and commentary for informational purposes only. It does not constitute investment, financial or legal advice and does not recommend the buying, selling or holding of any security or investment. Analysis reflects the author’s views at the time of publication and is not tailored to any reader’s individual circumstances. Readers should seek independent professional advice before making investment decisions.