New work actually decreased 0.2% during the quarter but a 0.6% increase in repair and maintenance activity helped lift the overall figure.

At a sector level, four out of the nine sectors monitored grew during the quarter with private housing repair and maintenance standing out with a 2.9% increase.

Conversely, private new housing was the biggest detractor by falling 1.9%.

On a monthly basis construction output is estimated to have grown by 0.2% in September 2025; following a downwardly revised decrease of 0.5% in August 2025 and an upwardly revised increase of 0.2% in July 2025.

Commenting on these figures, Terry Woodley — managing director of development finance at Shawbrook — said these provided a “glimmer” of positivity for the coming months.

“Attention will be firmly on the Autumn Budget as developers keep a close eye on any significant changes,” said Terry.

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“As doubts grow over the feasibility of meeting the 1.5 million housebuilding target, pressure is on Rachel Reeves to remove barriers currently halting progress.

“Developers remain confident that targets can be hit — but they need proper backing to make this happen.”

Neil Leitch, managing director, development finance at Hampshire Trust Bank, still sees opportunities in the market with sustained demand from developers but argues that “confidence is fragile” ahead of the Autumn Budget.

“As these figures show, construction remains under real pressure,” said Neil.

"The appetite is there from developers, and the need is clear among homebuyers and tenants — lenders have the capacity to fund viable schemes, but uncertainty over timing and delivery continues to hold projects back.

“The pressure is not evenly spread and developers in some regions face longer waits for planning and greater pressure on labour, making it even harder for smaller firms to stay active.”