The downturn in UK housebuilding eased last month, with residential construction recording its slowest decline since October 2025. The S&P Global UK Construction Purchasing Managers’ Index (PMI) for housebuilding increased to 41.8 in July, up from 35.9 in June.
Despite this improvement, housebuilding remains in contraction, as a reading below 50 indicates a decline in activity. The broader construction PMI also saw an uplift, rising to 44.7 from 38.4 in June, suggesting the sector is beginning to stabilise after a sharp downturn in the second quarter.
New orders reached their highest level since September 2025, although workloads continue to fall. Employment declined for the 19th consecutive month, but at the slowest rate since February, and business expectations improved to their strongest level since February.
However, industry experts caution that significant obstacles persist. Joe Sullivan of MHA noted that housing is still under pressure from affordability constraints, planning delays, and fragile buyer confidence. Richard Pike of Phoebus Software echoed these concerns, adding that economic uncertainty means many prospective buyers are delaying moves, making developers reluctant to bring forward new sites.
Kelly Boorman of RSM UK emphasised the need for greater clarity on housing funding and how barriers in planning, design, and procurement can be overcome. Maria Harris from the Open Property Data Association suggested that improving the speed and certainty of property transactions could also support housing supply, as slow and unpredictable processes reduce confidence for both developers and buyers.