INSIGHTS
Construction Market Intelligence
UK Edition
Q3 2025
South West
There is a national drive for new houses and apartments, yet Bristol is not seeing an increase in planning consents being secured. A number of developers appear to be landbanking sites due to the impact of interest rates on the sale of private units and the viability of build-to-rent schemes.
Until such time as interest rates are reduced sufficiently to restore confidence and Section 106 planning requirements eased, it is unlikely that many of these residential schemes will proceed.
MARKET CONDITIONS & PIPELINE
Region’s construction sector active but cautious over project viability
Bristol’s construction scene remains stable in terms of activity, yet larger developments are still failing to gain swift planning permission. The market sentiment continues to be cautious with project viability still proving to be a problem.
There is ever-present demand for new houses, apartments and purpose-built student accommodation, but securing permissions and planning consents for residential sites is slowing down. The private sector is seeing the impact of interest rates with developers unable to pass the viability stage for build-to-rent schemes. They are also struggling with the level of Section 106 affordable units being imposed by planners on their schemes.
The uncertainty of the time/cost impacts associated with securing Gateway 2 and 3 approvals is causing further concerns about project viability, along with the costs of the new Building Safety Levy which will come into effect in the autumn of 2026.
Despite not currently operating in a growing market, contractors are still reporting good work pipelines with healthy order books. With some large projects continuing across the region’s cities, this will help to keep tender prices steady. Although, reports from the market suggest the demand for and scarcity of MEP subcontractors is inflating tender returns across the supply chain.
RLB Market Activity Cycle
The RLB Market Activity Cycle is a representation of the development activity cycle for the construction industry.
RLB considers 10 sectors to be representative of the construction industry as a whole. Each sector is assessed as to which of three activity level zones – peak, mid or trough – best represents the current status of the sector within the cycle. This assessment is then refined by identifying whether the current status is in a growth phase or a decline phase.
The subjective current performance of sectors is identified by ascribing one of the coloured arrows (shown in the legend of the chart) to each sector. NB: In this analysis, sectors are not individually weighted.
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Market sector activity analysis: UK
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of multiple regions enables the calculation of a national representation of percentage of sectors in each phase of the cycle at a point in time.
Market sector activity analysis: SOUTH WEST
▲ Peak Growth ▲ Mid Growth ▲ Trough Growth
▼ Peak Decline ▼ Mid Decline ▼ Trough Decline
Consolidating the results of a region enables the calculation of a regional representation of percentage of sectors in each phase of the cycle at a point in time.
TENDER PRICES
- Tender prices are forecast to rise in line with general inflation, with prices increasing steadily from current levels but not drastically as in previous years.
▉ RLB South West
▉ BCIS (National) TPI ▉ BCIS (GBCI)
▉ Competitors' range (High & Low)
INPUT COSTS
- MEP tender returns have seen a significant increase in prices due to the scarcity of resources and lack of availability of skilled subcontractors.
SECTOR FOCUS
Education
While higher education has reported a downturn over the last year, new schemes are rapidly coming to market. It should be noted that on a number of these projects, the university concerned has indicated it is looking for new funding rather than using any existing capital it may have.
Infrastructure
Local infrastructure continues to see growth across the region, including new highways projects in Herefordshire and Somerset and schemes focusing on active transport measures.
Residential
New-build affordable homes and public sector housing, while remaining a key focus for local authorities, appear to be slowing down. Some local authorities are reporting that the combined effect of increased borrowing and concerns over the government review of their Housing Revenue Account (due in January 2026) is impacting the amount of capital available to construct new schemes. Meanwhile, they are concentrating on decarbonising and improving their existing housing stock.
The Guinness Partnership
RLB is working with The Guinness Partnership on various affordable housing schemes in the South West region.
One of the key projects involves building 104 high-quality affordable flats and a new neighbourhood police station on Trinity Road, Bristol. This development aims to help meet the strong need for low-cost housing within the city.
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