What does 2025 have in store for UK homebuilders?

The construction industry is at a critical juncture as we enter 2025, facing both significant challenges and promising opportunities. On one hand, the UK Government’s new homes target has added pressure on homebuilders while also laying bare labour shortfalls and issues within the industry. On the other hand, the industry is experiencing a period of innovation in building design and materials that will aid in meeting new regulatory standards.

While there’s no telling exactly how the year ahead will go, we can make some educated guesses about 2025. Roly Ward, Head of Business Development at MEDITE SMARTPLY, offers his thoughts.

Labour shortfall risks targets

The UK’s ongoing housing crisis remains at the forefront of conversations surrounding the construction industry, and for good reason. Housing supply in the UK has been an issue, in one form or another, for much of the past century and has unquestionably escalated in the past 15 years. People need homes. Governing parties want to be the ones to deliver a solution during their tenure. Homebuilders are in a challenging position to construct high volumes of houses within relatively tight timeframes.

Although funding for homebuilding projects has increased in recent months, several housing organisations have expressed concerns that the current timescales for certain funding schemes are too restrictive. In reference to the Affordable Homes Programme, Southern Housing has commented that an extension is vital “to deal with contractor and regulatory delays”.

Many of these delays on the contractor and homebuilder side originate from a chronic shortage of available labour. According to the Construction Industry Training Board (CITB), an additional 251,500 workers will be needed by 2028 to meet demand. This shortfall has been ongoing for several years, driven by an ageing workforce and the impacts of Brexit.

The Construction Products Association (CPA) highlights a similarly concerning trend: an average annual loss of 70,000 workers over the past five years. The CPA’s autumn forecast also highlighted that apprenticeship starts averaged 31,000 per year—with a 40 percent dropout rate.

In response, the UK Government aims to upskill the current workforce and enhance apprenticeship programmes through various initiatives, including establishing Technical Excellence Colleges. However, the skills crisis is expected to persist, demanding innovative solutions to ensure sustainable growth in the sector.

Setting the future standard

The emergence of new regulatory standards, as we’ll see in the coming year, is compounding the growing skills and knowledge gap in the construction industry. This year, the mandatory implementation of the Future Homes Standard will introduce crucial changes to building regulations, particularly focusing on energy efficiency. The need for sustainable materials and practices cannot be understated, with the residential sector accounting for 19 percent of the UK's final energy consumption in 2021.

Innovative solutions, such as highly engineered timber panels, are emerging as vital components in constructing airtight, thermally efficient buildings. These materials not only improve structural integrity but also integrate vapour control and air barriers, significantly bolstering energy performance.

It’s with these innovations that the Future Homes Standard presents an opportunity for homebuilders to improve the overall performance of building designs. For example, the Property Care Association (PCA) has stated that the new standard presents a vital opportunity to rethink ventilation for properties — something that goes hand in hand with enhancing energy efficiency, as well as occupant wellbeing.

Healthier living spaces

Beyond regulatory changes, the growing emphasis on wellbeing in living spaces is a trend that offers further opportunity to homebuilders. In addition to the ventilation aspects that the PCA highlighted, sound insulation has become a key factor in creating comfortable environments. Building regulations in England, Wales and Northern Ireland currently require at least a 40dB reduction in airborne noise within residential units. Timber panels offer versatile applications in various joist systems, contributing to improved sound control and overall quality of life in housing developments.

As we enter 2025, the construction industry must navigate these complex dynamics, balancing ambitious targets, addressing skills shortages, and adapting to evolving regulations while innovating towards sustainability and enhanced wellbeing. This landscape presents unique opportunities for forward-thinking solutions that can redefine the future of the built environment.