With the Autumn Budget scheduled for 26 November 2025, the UK construction industry is preparing for announcements that could significantly shape activity, costs and confidence heading into 2026. Against a backdrop of economic slowdown, skills shortages and ongoing cost pressures, the sector is paying close attention to what the Chancellor might reveal.

Rumoured Priorities and Policy Directions

Although details remain speculative, several themes have emerged across industry commentary:

1. Fiscal tightening through indirect taxation

Rather than raising headline tax rates, the Government is reportedly considering measures such as freezing tax thresholds. While subtle, these moves can reduce household spending power — a key factor influencing private housing demand. With the housing market already subdued, any reduction in buyer confidence could prolong the slowdown in residential construction.

2. Potential reforms to property taxation and housing schemes

Rumours suggest changes to Stamp Duty Land Tax (SDLT), possibly replacing it with a more modernised structure or introducing targeted reliefs for first-time buyers. Construction bodies have also called for revised support schemes to stimulate new housing supply and improve affordability. Should such reforms be included, they may help kick-start activity in the early part of 2026.

3. Review of business incentives and green investment

The Government is under pressure to deliver on its climate commitments. Discussions have centred on possible incentives for retrofit work, decarbonisation technologies and energy-efficient construction. Enhanced support here could unlock substantial work in public buildings, social housing and commercial premises, offering stable pipelines for contractors.

4. Ongoing pressure on labour and employer costs

The industry continues to battle high labour costs, insurance pressure and shortages in key trades. If the Budget introduces any additional employer obligations or regulatory requirements, contractors could face increased overheads. This would place further strain on project margins and tender competitiveness.

What These Rumours Mean for the Construction Sector

Contract conditions and pricing

Main contractors are already adopting more cautious pricing strategies due to economic uncertainty. Risk allowances in tenders may increase, and subcontractor packages could become more tightly specified. Firms will need to ensure their pricing reflects potential cost fluctuations over the medium term.

Workload and sector performance

Repair and maintenance remain relatively resilient, but new-build housing and parts of commercial construction are sluggish. Should the Budget include stimulus for housing or retrofit programmes, the industry could see increased contract awards and improved visibility of future pipelines.

Retrofit as a potential growth area

If retrofit incentives or tax reliefs are announced, the industry may experience rising demand in energy efficiency upgrades — including insulation, ventilation, window replacements and building fabric improvements. Many contractors are already positioning themselves to deliver such work.

Supply chain resilience

Any adjustments to employer taxes, insurance, energy duty or import costs will ripple through the supply chain. Contractors may face material price shifts or extended lead times, prompting main contractors to write more stringent terms into supply agreements.

Conclusion

While the construction sector is hopeful for targeted support — particularly for housing and retrofit — the prevailing expectation is that the Autumn Budget will be shaped by fiscal restraint. This may mean continued cost pressure and cautious market behaviour unless notable stimulus measures are introduced.

For now, contractors across the industry should prepare for multiple scenarios: tighter margins, steady (if unspectacular) activity in repair and maintenance, and the possibility of new opportunities in retrofit and energy-efficient building if government policy leans in that direction.

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Sources 

  • RSM UK – Autumn Budget 2025 Predictions

  • EY UK – Autumn Budget 2025 Predictions

  • Menzies LLP – Autumn Budget 2025: Property and Construction Sector Predictions

  • PBC Today – Experts Share UK Construction Autumn Budget Wishlist

  • Insider Media – What the Construction Industry Wants from the Autumn Budget 2025

  • Development Finance Today – Construction Activity Creeps Up as Industry Awaits Budget

  • Atkins Search – How the 2025 Autumn Budget Will Impact UK Construction Jobs