According to the Office for National Statistics, the decline in UK construction output in the three months to February 2026 was mainly due to falling activity in private housing.
Total production declined 2% compared to the prior three-month period, new work declined 3.4% and repairs and maintenance remained flat. Within new work, private housing recorded the largest decline with a 6.5% decline. Meanwhile, repairs and maintenance of private residences increased by 2%.
On a monthly basis, construction output rose 1% in February, following an upwardly revised increase of 0.5% in January and a decline of 1.3% in December.
The increase was driven by gains in both new work and repairs and maintenance, which increased by 1% and 0.9% respectively, with the main contribution being private housing new work, which increased by 4.3%.
Commenting on the figures, Neil Leach, managing director of development finance at Hampshire Trust Bank, said: “This decline in housebuilding reflects the reality on the ground.
“Developers are still operating with very little margin for error. The challenge is not just planning delays, but also planning for uncertainty, as even well-prepared, policy-compliant plans face less predictable outcomes. This makes it harder to deploy capital with confidence.”
He added: “Viability remains completely balanced. Construction costs are still high, funding conditions are tighter than many expected, and land values have not always adjusted to reflect that change.
“There is pressure on margins, reducing flexibility when it comes to launching schemes and limiting how much can be taken forward with confidence.
“This is shaping behavior across the market. Developers are becoming more selective, focusing on plans that can be delivered under current conditions and managing how and when to deploy capital to avoid overextension in a less predictable environment.”