Labour cabinet reshuffle sees Environment Secretary shift to housing
Steve Reed has become the new Housing Secretary this week, following Angela Rayner’s resignation after she failed to pay enough stamp duty on a property she bought in East Sussex.
Reed was previously Environment Secretary, having also held the positions of Shadow Justice Secretary and Shadow Secretary for Communities and Local Government.
Reed has represented Streatham and Croydon North since Labour came to power; from 2010 to 2024, he was MP for Croydon North.
Annual house price growth slows in August
The latest house price index from Nationwide has found that house prices in August dropped slightly by -0.1%, with annual growth softening from 2.4% last month to 2.1%.
The average house price is now £271,079 (Jul-25: £272,664).
Robert Gardner, Nationwide’s Chief Economist, said: “The relatively subdued pace of house price growth is perhaps understandable, given that affordability remains stretched relative to long-term norms. House prices are still high compared to household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost of living pressures in recent years.
“Combined with the fact that mortgage costs are more than three times the levels prevailing in the wake of the pandemic, this means that the cost of servicing a mortgage is also a barrier for many. Indeed, an average earner buying the typical first-time buyer property with a 20% deposit faces a monthly mortgage payment equivalent to around 35% of their take-home pay, well above the long run average of 30%.”
Waste water issues stalling 30,000 homes
A new report from the Home Builders Federation (HBF) has revealed that almost 30,000 new homes are blocked due to a “failure to build wastewater capacity” and inconsistencies in wastewater policy application.
The report, A Drain on the Nation, also highlights that developers have paid almost £2.3 billion to water companies since 2020 to support infrastructure enhancements, yet planning permission is still being refused or delayed over perceived sewerage capacity issues, even where water companies have not raised objections.
The HBF estimates that the 30,000 stalled homes would generate an estimated £900m in Section 106 contributions, funding schools, roads, green spaces, and public amenities.
Report tackles Wales housing crisis
The HBF also published a report this week which sets out a blueprint to address the “chronic undersupply” of housing in Wales.
The report, Increasing housing supply in Wales, was published ahead of the Senedd election in 2026, and sets out 12 key actions for the next Welsh government to deal with the nation’s housing shortage.
The HBF noted that Wales was facing a 28% shortfall in housing supply against the Welsh Government’s 2019 estimate of housing need.
Construction output continues to decline
Construction activity in the UK has declined for the eighth consecutive month, according to the S&P Global UK Construction Purchasing Managers’ Index.
The index registered 45.5 in August 2025, with any value below 50.0 indicating negative growth.
Whilst the reading rose from 44.3 in July, the index has been below 50.0 every month so far in 2025.
Residential dropped to 44.2, with respondents citing a reduction in subcontractor usage and restrictions on recruitment as key drivers for stifled output.
Meanwhile, UK cement production has hit its lowest level since 1950, as high energy, regulatory and labour costs hamper the sector.
Data from the Mineral Products Association shows that the UK made 7.3 million tonnes of cement in 2024; around half of what it produced in 1990.
However, latest figures from the Builders Merchant Building Index has found that builders’ merchants sold 4% more in the second quarter of 2025 when compared to the same quarter last year.
Takings through merchants’ tills in Q2 2025 were 11.7% higher than in the previous quarter.
Developer and supply chain updates
Berkeley have experienced “stable” trading during the first four months of its financial year, but called for deregulation in London.
In an update covering 01 May to 31 August 2025, the firm said that it was on track to achieve its pre-tax earnings guidance of £450m for the full year ending 30 April 2026.
Berkeley called upon ministers to address the challenges around the Building Safety Regulator, and not increase taxation over and above the Building Safety Levy.
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Brickmaker Michelmersh said pre-tax profit was down a third in the first half as delays in residential schemes due to building safety hit their order book.
The firm said demand for bricks in the UK remains 25% below the most recent 2022 high point.
Chief Executive Ryan Mahoney said: “Low planning approvals process, particularly in London and the South East as a result of the Building Safety Act and the Gateway 2 and 3 regulations, has significantly impacted the recovery momentum in some of our key markets most noticeably in the developer space.”
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