Steve Mulholland, CEO of the CPA, welcomed Rachel Reeves鈥� renewed commitment to the government鈥檚 target of 1.5m new homes. However, he warned that the plant hire firms essential to delivering on this aim were struggling with costs as they seek to recruit new personnel. 鈥淲ith unemployment forecast to peak later this year, now is the moment to strengthen industries like construction that drive jobs, productivity and regional growth.鈥�
Pointing out that the vast majority of hire firms are family businesses, Mulholland cited the impact of tax changes, alongside increased employer NI contributions. These businesses, he says, now face, 鈥淗igher employer National Insurance contributions, rising wage costs and the looming impact of Business Property Relief and inheritance tax changes coming into force this April.
鈥淚f Government is serious about accelerating delivery, it cannot raise the cost of employment and investment at the same time. That means reversing measures that penalise family succession, introducing full expensing for leased plant and equipment, and ensuring employment reforms do not reduce flexibility.鈥�
At the BCIS, a spin-off of the Royal Institution of Chartered Surveyors, data services director, Karl Horton warned that the impact of this weekend鈥檚 attacks on Iran, could increase market uncertainty, and pointed out that slow growth forecasts had been made before the bombing started. 鈥淭he Office for Budget Responsibility鈥檚 downgrading of GDP growth to 1.1% in 2026 is very unlikely to ease concerns over geopolitical instability among construction鈥檚 businesses, clients and funders.
鈥淧rolonged unrest in the Middle East also raises risks for input construction costs. While it鈥檚 too early to draw firm conclusions, a spike in energy prices, such as the increases reported in the oil and gas markets this week, could see contractors and subcontractors paying more for transport and materials.聽This would place upward pressure on tender prices and could constrain project viability or delay investment decisions.鈥�
The NFB's聽Rico Wojtulewicz, director of policy and market insight, noting the OBR's pessimism on new housebuilding, said, 鈥淭he Government was handed a poisoned chalice with planning because the previous government created a bureaucratic quagmire aligning with NIMBY sentiment. Much of that has been unpicked, but because it takes time for laws to be made and projects to benefit from changes, 300,000 homes a year by 2030 is realistic but means that the 1.5 million new home commitment is unlikely to be met.聽
鈥淭o help ramp up housebuilding and construction capacity, we hope the Autumn budget will be used to increase market confidence through a new Help to Buy scheme, to pump-prime key infrastructure projects,聽to ensure unspent planning contributions are spent or returned,聽to let Homes England off the leash, and to find ways to help SME housebuilders and regional contractors in both procurement and planning.鈥�