Latest RICS Monitor sees improvement, but housing struggles
The latest quarterly sentiment survey from the Royal Institution of Chartered Surveyors (RICS) has revealed a modest recovery in workloads in the second quarter of the year, although overall activity remained subdued.
The report’s headline workloads indicator, which captures respondents’ assessment of activity across the wider construction industry, returned a net balance of –4% in Q2. This was up from –12% in the previous quarter, but still indicates that overall, firms reported no increase in workloads.
Private housing was the weakest-performing sector, posting a net balance of -12%.
Dr David Crosthwaite, chief economist at BCIS, said: “With the Autumn Budget a few months away, any recovery in activity in the interim is likely to remain modest at best.
“The situation between the US and Iran has not improved, and Bank Rate has been held at 3.75%, which means some clients and funders are more likely to defer investment decisions until the new Chancellor has laid out the latest tax and spending intentions.”
Meanwhile, the Office for National Statistics has reported that total construction output is estimated to have grown by 0.3% in the second quarter of 2026 compared to the first quarter.
Monthly construction output is estimated to have fallen by -0.1% in June, following a decrease of -0.8% in May.
The annual rate of construction output price growth was 1.9% over the year to June 2026.
Developer and supply chain updates
Avant Homes has agreed a deferred payment plan with the government over its obligations under the Developer Remediation Contract, providing liquidity support while eligible building safety works are funded through government schemes and repayments are spread over several years.
The agreement comes as Avant reported a pre-tax loss of £111m for the year to 30 June 2025, compared with £83m previously, including £27m of exceptional charges and £93m of financial expenses.
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Bellway completed 9,695 homes in the year to 31 July 2026, up 10.8% and above its previous guidance, while housing revenue increased to £3.14bn and adjusted operating profit is expected to rise to around £320m.
Despite the stronger performance, Bellway said the near-term outlook remains uncertain and called on the government to support the housing market, including through changes to stamp duty.
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L&Q reported a decline in turnover to £241m in the three months to 30 June 2026, down from £271m a year earlier, alongside lower surplus and completions.
However, the housing association’s debt position improved following a major asset sale, providing some relief despite weaker trading.
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Allianz Trade could cut credit insurance cover for suppliers to Vistry by as much as 70% in some cases, as the housebuilder prioritises cash generation and reducing its £470m daily net debt position.
The move could make it harder or more expensive for suppliers to trade with Vistry on credit, although suppliers can continue trading without insurance or seek alternative cover as Chief Executive Officer Adam Daniels pursues a wider balance sheet reset.
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Marshalls reported resilient first-half trading, with revenue down -0.5% to £317.8m but pre-tax profit increasing 13.2% to £24.9m, supported by cost savings and tighter financial discipline.
Landscaping Products delivered the strongest improvement, while weak new-build housing demand continued to weigh on Bricks & Masonry and Water Management.
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Pat Ritchie’s tenure as Chair of Homes England has been extended by six months to the end of April 2027, with Housing Minister Matthew Pennycook citing the need for continuity of experienced leadership.
Ritchie, who became interim Chair in April 2025, previously led the Homes and Communities Agency and has also served as Chief Executive Officer of Newcastle City Council.