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Published: 12/03/2026
UK housebuilding was broadly stable in 2025 but the sector remains vulnerable to economic headwinds, according to full-year reports from multiple developers and construction product manufacturers.
Financial statements published in March indicated modest growth across parts of the sector last year, despite affordability constraints and weaker activity in the second half.
Building materials supplier Forterra reported an 11% year-on-year increase in revenue in its bricks and blocks segment. The growth was supported by new build housing activity and higher domestic brick despatches, which rose by 6% compared with 2024(1).
The company said market activity was more subdued in the latter half of 2025 and expects modest price rises during 2026.
‘UK housebuilders and their supply chains have been resilient in the face of uncertainty, constrained consumer demand and input cost inflation. Insights from new full-year reports show that annual revenues have largely risen, with businesses adapting to tougher operating conditions,’ said BCIS chief economist, Dr David Crosthwaite.
‘However, the sector is not taking this stability for granted. After a sluggish few months, dampened by post-Budget uncertainty and wet weather, developers and suppliers must now contend with emerging cost risks linked to the conflict in Iran. As noted at the latest meeting of the BCIS TPI Panel, it is still too early to determine the long-term implications, but the outlook could deteriorate if the conflict persists.’
Some product manufacturers reported weaker profitability during 2025.
Ibstock’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were down by 10% on 2024 (2) while Breedon Group’s revenue and underlying EBITDA in Great Britain both fell on the year(3).
Breedon said subdued residential housebuilding, particularly in the second half of the year, as well as the timing of the Autumn Budget contributed to the weaker performance.
The company also noted that housing demand continues to be affected by affordability pressures, while regulatory requirements and rising input costs are influencing the viability of some new development sites.
Both manufacturers highlighted geopolitical uncertainty as an ongoing concern. Ibstock said it has secured 80% of its energy requirements for the 2026 financial year.
Performance among major housebuilders was mixed.
Persimmon reported a 12% increase in new home completions and a 16% rise in housing revenue during 2025(4). The company cited improved mortgage availability, real wage growth and planning reforms as supportive factors.
Vistry Group, by contrast, reported a 9% year-on-year fall in completions, contributing to a 4% decline in annual revenue(5). The company pointed to continued challenges in the open market and delays to some partner-funded developments linked to Budget uncertainty.
It also noted that wider macroeconomic conditions and mortgage affordability pressures for first-time buyers affected sales rates.
Looking forward, Vistry Group predicted minimal material and labour cost inflation during 2026, subject to improved supply market conditions and geopolitical disruption to the supply chain.
‘The timing of the conflict in Iran arrived just as the housing sector appeared to be recovering. Interest rates had fallen, helping to ease mortgage costs for consumers. However, further reductions in Bank Rate in the near term now seem unlikely and renewed upward pressure is a possibility,’ Dr Crosthwaite added.
‘Businesses will be watching developments in Iran closely. At present there is measured concern, but also a view that disruption to activity and profitability may be limited if tensions stabilise quickly.’
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(1) Forterra – Full Year Results Presentation – here
(2) London Stock Exchange, Ibstock PLC, results for the year ended 31 December 2025 – here
(3) London Stock Exchange, Breedon Group PLC, annual results 2025 – here
(4) London Stock Exchange, Persimmon PLC, full year results for year ended 31 December 2025 – here
(5) London Stock Exchange, Vistry Group, full year results for year ended 31 December 2025 – here
