In Q2, the value of work starting on-site valued under £100m fell 15% from the previous period and was 38% lower than last year’s levels.

Residential construction contributed heavily to this decline, with housing starts falling 31% from Q1 which puts the activity down 52% year-on-year.

Private housing was the principal driver of this decline with Glenigan attributing this ongoing stagnation as being “likely” due to high interest rates which impact buyer appetite.

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Furthermore, rising labour and material costs are making developers hesitant to commit shovels to ground until the market stabilises.

Starts dropped 40% compared with the preceding three months, finishing 63% lower than 2025’s levels.

Glenigan economic director Allan Wilen attributed weakening activity to impacts of the Iran War on consumer confidence, with developers adjusting their plans accordingly.

“The impending change of Prime Minister will add to uncertainty in the near term and could disrupt the roll-out of departmental investment programmes,” said Allan.

“There’s still a mountain to climb before we reach the sunny uplands of universal recovery.”