A range of industry experts consider what was good – and bad – about 2025 and share their thoughts about the 12 months ahead
Why 2026 must be the year of joined-up thinking
Paul Ruddick, chairman, Reds10
The government often faces criticism – including from our industry – but it’s important we also give credit when it’s due. One area of real progress is transparency in the infrastructure pipeline.
Last summer, the National Infrastructure and Service Transformation Authority (NISTA) launched a groundbreaking infrastructure pipeline tool, offering unprecedented visibility into 780 planned projects worth £530bn over the next decade. This is a major step forward for UK infrastructure planning and delivery.
In 2026, I want to see government and industry build on this by aggregating demand. Greater oversight of government procurement – for example, when hospitals, reservoirs, schools and power plants are built in the same region – would allow better coordination on procurement, skills investment and apprenticeships.
This joined-up approach would boost efficiency, productivity and innovation. Breaking down silos across Whitehall is essential, and NISTA’s tool can help make that happen.
Gateway 3 should drive investment in skills and training to ensure work is delivered to the highest standards
Secondly, while the Building Safety Act has led to a focus on gateway 2 delays, attention will soon shift to gateway 3 – the stage where work is completed and certified. By enforcing compliance and adherence to approved plans, gateway 3 should drive investment in skills and training to ensure work is delivered to the highest standards.
I hope this sparks a move away from a heavy reliance on agency labour towards a properly trained, in-house workforce. At Reds10, this is our model: bringing everything in-house rather than managing an ever-expanding supply chain.
We believe this approach is the future, ensuring investment in skills and training that delivers greater quality, innovation and productivity.
From a Reds10 perspective, 2026 will see us accelerate our expansion into the health and residential markets. We see huge potential for industrialised construction to deliver high-quality, affordable housing and temporary accommodation, helping local authorities tackle the housing crisis.
Modular housing has failed previously due to overexpansion without proven processes or a product
Modular housing has failed previously due to overexpansion without proven processes or a product. At Reds10, we have adopted a more measured approach: we have five factories in Driffield, North Yorkshire, with a committed pipeline and are using our experience of developing living accommodation for the armed forces to develop prototypes for the local authority housing sector.
We are confident that as we accelerate our expansion into this sector, we will demonstrate the true potential of industrialised construction to solve Britain’s housing challenge.
Likewise, we are also energised by the government’s multi-billion-pound New Hospital Programme (NHP) and its potential to transform the way we build infrastructure. Last year, Reds10 unveiled a groundbreaking prototype of a modular hospital in-patient bedroom to help drive the industrialisation of Hospital 2.0.
If approved by the NHP, the prototype will serve as the standardised in-patient bedroom across the entire NHP, providing the NHS with an MMC modular solution that accelerates the delivery of the next generation of hospitals.
The industrialised construction process will drive up productivity, quality and sustainability, all the while delivering better value. This means the NHS and its supply chain are building a programmatic system, not just the next project, and in the process they will transform the construction of hospitals for decades to come.
This kind of programmatic approach is also vital to ensure the industry can fully realise the potential of AI and digitalisation. To date we’re only really scratching the surface of AI and I expect to see huge advances in its implementation across construction process in 2026. For construction to fully benefit from that revolution, standardisation and industrialisation of construction through a more programmatic approach will be vital, ensuring further productivity and performance benefits.
AI, architecture and the public good: the crossroads we face in 2026
Muyiwa Oki, past president at the RIBA and a senior manager at Mace
I enter 2026 with two aims: protect the public purpose of architecture and raise the productive capacity of our industry. Both need institutional change and a sharper discipline about social, environmental and economic value.
In about 15-years cycles, technology rewrites the rules that govern productive output. The PCs, the web, and the cloud platforms each reshaped industry. Generative AI is the next platform shift, and early signs suggest it could be bigger than the internet. The independent analyst Benedict Evans calls this “AI eats the world”; a cycle of bundling and unbundling, where incumbents absorb, startups disrupt, and workflows fracture before they settle.
For architecture, as a professional service, it means more than faster rendering. It could also mean many things, such as rethinking design-to-delivery processes. Embedding intelligence into specification, as well as using AI to interrogate carbon, cost, and compliance in real-time.
AI could ould multiply capacity and productivity as the steam engines did for Britain all those years ago
Done well, this could multiply capacity and productivity as the steam engines did for Britain all those years ago, five times the effective labour without five times the headcount.
Productive use of AI and skills reform
If AI is to help, it must raise entry-level capability rather than erase it. The near-term labour market picture is mixed. Automation looks to squeeze some junior roles. However, the broader policy signal in the UK is supportive: national compute, supercomputing capacity.
Research resources and local adoption funds is set to expand. For the built environment, that should mean faster optioneering, better clash detection, richer understanding materials, and stronger whole-life carbon accounting, without hollowing out early years, formative training.
History warns us of the downsides. In the 1980s, General Motors spent $45bn on robotics to beat its Japanese rivals. Its results led to robots welding doors shut, creating more indirect labour than they eliminated. Now, an MIT report shows that 95% of enterprises’ AI pilots deliver zero financial return.
Why? In short, automation was bolted onto opaque workflows rather than fixing them. Architecture as a professional service is vulnerable to the same trap. Our processes run on hallway conversations, pin-up critiques, undocumented approvals and change management, with archaeological spreadsheets. If we train models on this sloppy, tacit process, we get high-speed replication of bad practice.
By contrast, the antidote is the Toyota principle of “jidoka”, which translates as automation with a human touch and in this context means “don’t automate what you haven’t mastered manually”. Detect, fix, instrument the workflow, then automate in small, local experiments, which according to the Toyota model, will beat massive CapEx bets.
Architecture, design, and construction will advance when the industry allows. This is what Darun Acemoglu and James A. Robinson, joint recipients of the Nobel Prize in Economic Sciences, call “creative destruction”: retiring brittle habits so new, more inclusive frameworks can take root. That renewal spreads expertise, dislodges gatekeeping, and equips us to meet a changed public outlook, to welcome incentives that benefit human achievement.
Finance that subverts purpose
Hyper-financialisaton changes the decision-making logic. When capital’s sole aim is return, function becomes whatever feeds the market, and purpose collapses solely to making profits. Architecture and the built environment are poor financial instruments; left to private capital alone, they will be underfunded and underprovided.
Parks and museums exist because we, the public, choose not to neglect them. In 2026, the same principle will apply to civic buildings, social infrastructure and the generosity of public space: if we do not call for them, engineer procurement to protect them, the market will make a different choice in favour of more profit only.
“Stability” was the headline of this 2025 autumn Budget. But stability can become a pretext for inertia
The UK’s fiscal stance compounds the risk. “Stability” was the headline of this 2025 autumn Budget. But stability can become a pretext for inertia. With promised investment and skills, the supply-side reforms are modest, expected to lift GDP by only small fractions over a decade.
This is in opposition to radical growth strategy. To signal this, procurement, planning, and insurance need to move in step, so we don’t end next year with lots more announcements, but few shovels in the ground.
What to do in practice? First, reassert public purpose in contracts. Embed social value, access, and long-term maintenance in briefs and commercial terms. Purpose cannot survive if it is absent from the legal instruments we sign.
Second, guard the pipeline of talent. Pair AI-enabled workflows with structured learning, so that juniors should lead audits, coordination, and analysis, and not become simple prompt engineers.
Third, use institutional renewal to widen participation. Remove needless barriers to entry and progression. Curiosity beats conformity.
The platform shift is real. The question is whether we use it to build better or to replicate and scale the old order. Our choices in 2026 will decide whether architecture remains a public service or becomes collateral in a race for larger capital returns.
From safety to procurement: the legal shifts coming up for construction over the next year
Theresa Mohammed, partner, Watson Farley & Williams
If 2025 was the year the UK reset its infrastructure ambitions, 2026 will be the year those promises collide with delivery risk and the new public‑law scaffolding now in place. The government’s multi‑year spending review sets departmental budgets through 2028/29 and capital investment plans to 2029/30 – embedding an extra £113bn in capital spending compared to prior projections.
Significantly, energy and transport feature heavily, with funding earmarked for nuclear projects and regional transport networks. On the flip side, HS2 continues its “reset” phase: Phase 2 has been scrapped; Euston’s redevelopment has transitioned to a private finance model; and the public accounts committee has flagged persistent cost/value and governance concerns.
Expect these factors to reshape drafting-scope change negotiations, private finance clauses, cascading step-down obligations, notice and termination protocols, and variation strategies across major delivery programmes.
The Building Safety Act remains a live source of industry falls. In URS Corporation Ltd v BDW Trading Ltd, the Supreme Court confirmed that developers may recover remediation costs via negligence, not just under the Defective Premises Act, even if they no longer own the building and act “voluntarily”. The judgment emphasised that retrospective limitation extensions under section 135 of the BSA/DPA open broader recovery routes.
Meanwhile, the Remediation Bill and Building Safety Levy advance; the Levy, due to start on 1 October 2026, will apply to all new residential schemes above 10 dwellings or 30 bedspaces in purpose-built student accommodation, with charging managed by local authorities and criminal penalties for omissions. Developers, contractors and consultants should brace for formal duties on buildings over 11 m, mandated completion timetables, and escalatory enforcement – including fines and potential imprisonment.
Public-sector construction in 2026 will also be shaped by the Procurement Act 2023, in force since February 2025. It imposes mandatory 30‑day payment terms, extends transparency obligations (KPIs, variations, terminations), and codifies the test for interim relief, alongside introducing a flexible competitive procedure. The Act requires public bodies to publish performance notices every six months, enabling regulator-led spot checks on payment compliance. Contractors should anticipate greater scrutiny.
At the same time, JCT 2024 brings in some practical updates – duty holder roles under the Building Safety Act, streamlined email notices, sustainability targets, and a fresh Target‑Cost Contract format. But where things really get interesting is dispute handling. We expect adjudications to pick up both pace, and critical importance. The latest Technology and Construction Court (TCC) decisions show why.
With new safety duties, procurement rules and sustainability targets in play, contracts will need careful drafting and proactive risk management
“On-account” payments can be binding. In 1st Formations Ltd v Lapp Industries Ltd [2025] EWHC 1526, the contractor requested £100,000 “on account,” and the employer didn’t respond with a payment or pay‑less notice. The adjudicator awarded the £100,000, and the TCC enforced it – even though the sum was part of a larger £341,000 valuation.
“Smash-and-grab” defences remain powerful. In VMA Services Ltd v Project One London Ltd [2025] EWHC 1815, subcontractor VMA relied on a “smash-and-grab” defence. After Project One failed to issue a pay‑less notice, an adjudicator ordered payment. The TCC threw out Project One’s attempt to block it.
Minor procedural slip-ups won’t sink adjudications. In Construction Muzzy Ltd v Davis Construction [2025] EWHC 2258, even though there were alleged natural justice issues and two similar adjudications, the court still enforced them. The TCC emphasised that, unless there is a serious procedural flaw, enforcement will follow.
These cases underline a key trend – adjudicators and the TCC remain firmly in the “pay now, argue later” camp. For legal teams this means we should be proactive – talk to clients about clear notice obligations and consider all resolution options early.
We believe, that 2026 will test whether the UK’s bold infrastructure plans can survive the realities of delivery risk and tighter legal frameworks. With new safety duties, procurement rules and sustainability targets in play, contracts will need careful drafting and proactive risk management.
Those who embrace clear payment processes, robust dispute strategies, and early compliance planning will be best placed to thrive in what promises to be a challenging but opportunity-rich year.
What’s next in the evolution of sustainable construction?
Andrew Parkin, partner and chair of Cundall’s Futures Group
2026 will be a year of opportunity and challenge. I foresee three major themes on the industry’s agenda: climate resilience, the ongoing power shortage, and the persistent skills gap.
Climate resilience and adaptation have been urgent topics in the industry for a few years now. As we know, the UK and the rest of the world will experience more frequent and extreme weather events and natural hazards, such as storms and flooding.
Discussions around sustainability in 2026 will centre around making buildings and infrastructure both resilient and safe from inevitable and extreme weather events. This will eventually become a requirement by insurers.
The lack of power in the UK will also be an interesting and important conversation. As the UK strives to become a world leader in AI, and life science, it will also require facilities for these that will be energy intensive. Coupled with a requirement to move to renewable energy via electrification, solutions like battery storage energy schemes will start getting discussed and rolled out more frequently.
We have to be smarter in the way we develop land, being prepared to build where the power is available, rather than expecting the infrastructure to adapt to our needs in the short term.
The skills crisis has haunted the construction industry for some time now and it is likely to amplify in 2026, especially given the ambition the UK has to deliver infrastructure projects and housing. While conversations around skills will continue and potentially gain momentum, I hope to see more creative ways of making careers in the built environment more accessible and attractive to people.
In the autumn Budget, the chancellor spoke about introducing youth guarantees for young people to seek training and develop their skills, alongside the freeing up investment for small and medium enterprises to hire and train apprentices. The long-term benefits of this will be a promising step forward, but there needs to be more done in fixing the immediate skills-gap our industry faces, including retraining workers whose roles are threatened by AI or overseas manufacturing.
So, 2026 will be a year of opportunity, but the challenges it brings will also make it the year of “mind the gap”. The gap between the way we have designed buildings in the past and the way we must design them now. The gap between where power is available and where it is truly needed, and the gap in skills required to design, construct, and maintain the buildings and infrastructure needed to move forward into an AI-powered, zero carbon future.
The retrofit imperative in 2026
Kevin MacLennan, head of building decarbonisation, UK & Ireland, at Mott MacDonald
2025 saw lots of new buildings unveiled that have gone all-electric and feature the latest technology to drive energy efficiency, which demonstrates what can be achieved when starting from scratch. Nonetheless, it is retrofitting existing building stock, specifically to deliver and support heat decarbonisation that will be key to meeting the UK’s 2050 net zero targets and, unfortunately, progress here has not kept pace with what is required.
With 80% of 2050’s buildings already in use, new builds alone won’t deliver net zero. Understanding the hurdles faced by building owners reveals the key trends shaping 2026.
1. Funding challenges
Uncertainty in public sector funding for decarbonisation and retrofit projects seen in 2025 is expected to persist this year. Grant schemes like the public sector decarbonisation scheme (PSDS) remain paused and no clear replacement has yet been announced.
This has made it very hard to get traction for decarbonisation projects in the public sector, as organisations have historically been reliant on grants to cover the high upfront and operational costs of electrification and heat pump adoption. There is potential that there will be an announcement from the government for a replacement for PSDS this year, however, without certainty it is difficult for public sector bodies to plan interventions.
2. The rise of pragmatism
Where funding or investment is available, projects will show more of a shift towards pragmatic, incremental retrofit strategies that create steps towards, rather than fully achieving, decarbonisation. Private sector investment will increasingly be driven by compliance in 2026 and work to meet minimum energy efficiency standards (MEES) rather than voluntary net zero commitments. MEES requires compliance for leasing commercial assets, leading to a trend towards minimum performance measures rather than deep retrofit.
3. Hybrid heating focus
The more pragmatic approach is also likely to drive demand for hybrid heating systems, such as using a combination of heat pumps and gas boilers. This trend will reduce reliance on fossil fuels without higher capital costs and delays often encountered with full electrification solutions or challenges around timely grid connections. The cost-effectiveness of this makes it more feasible for many building owners given current constraints.
4. Supply chain challenges
A challenge in the adoption of heat pumps on existing buildings has been the lack of maturity in the supply chain with demand for people skilled at fitting and setting up the systems outstripping availability. Heat pumps also call for careful maintenance and uncertainty over this operational cost – alongside the availability of people to carry out the work – can deter some building overs from investing.
5. Electricity pricing
The spark gap – the difference between electricity and gas prices – will continue to have an impact on retrofit decarbonisation trends this year. High electricity costs remain a barrier to heat decarbonisation despite the welcome news in the autumn Budget that some levies placed on electricity would move to general taxation. If the UK really wants to accelerate heat decarbonisation through electrification, customers of all types need to see lower electricity costs.
6. Continued growth of solar
High electricity prices and falling cost of solar PV panels is likely to drive further investment of roof mounted systems with battery storage in both the public and private sector in 2026. The fast installation and low maintenance needs of solar, combined with high electricity prices, means this trend is likely to remain strong throughout the year and beyond.
7. Monitoring of building performance
While not every building owner has funds for major retrofit projects, they are looking to optimise the performance of their buildings and this year is likely to see more monitoring systems installed. Many buildings can use smart controls to make minor adjustments to improve energy efficiency and user comfort that can quickly deliver a return on investment. The added benefit is that this detailed building performance knowledge makes it possible to design better retrofit systems when funding does become available.
Overall, I expect to see a shift to longer term thinking over the coming year. The wave of businesses setting short term net zero targets, such as the 2030 date many pledged at the start of the decade, has largely ended. Early adopters of such targets – those that could see benefits to their CSR standing of achieving net zero early – are having to re-explore what is deliverable and by when in the current political and economic landscape.
I anticipate that 2026 will see more building owners reaffirm 2050 as their net zero target and use lessons from the early adopters to set themselves realistic route maps to get there. What is clear is that steps must be taken in 2026 and in each year up to 2050 or the UK will not reach net zero – there is no room for complacency.
A more considered development market in 2026
Tim Ward, CEO, Chetwoods Architects
The development industry has entered a more measured and selective phase. The emphasis has shifted away from scale and speed and towards relevance, longevity and alignment with occupier needs.
While market conditions remain complex, three broad forces are increasingly shaping how developers think about opportunity and risk: the adaptation of existing buildings, the changing nature of operational space, and the growing importance of place.
The role of retrofit and refurbishment has expanded significantly. Regulatory pressure, particularly around energy performance, has reinforced a wider industry recognition that existing stock represents both the greatest challenge and the greatest opportunity.
In 2026, refurbishment is no longer seen as a secondary option to new-build, but as a primary development route in its own right. This has encouraged a more thoughtful approach to asset selection and design, with developers focusing on buildings that can be reworked to remain relevant to occupiers over the long term. The industry’s mindset has shifted from replacement to re-use, with adaptability now central to development strategy.
Developers are recognising that long-term demand depends less on meeting today’s specifications and more on providing space that can accommodate future systems, processes and data requirements
At the same time, the definition of “fit for purpose” space continues to evolve. In industrial and logistics markets, occupier operations are becoming increasingly automated and data-driven, reshaping expectations of what good space looks like. Buildings are expected to support more sophisticated workflows, greater visibility of performance and the ability to respond to change over time.
While specific technologies will evolve, the wider implication for development is a growing need to align building design with operational intelligence. Developers are recognising that long-term demand depends less on meeting today’s specifications and more on providing space that can accommodate future systems, processes and data requirements.
Alongside performance and adaptability, the experience of place has moved to the centre of development thinking. Wellbeing and placemaking are no longer viewed as soft or secondary considerations; they are increasingly linked to occupier appeal, retention and identity.
Clarity of purpose, flexibility and long-term relevance
Jack Pinkney, director of property management, Form Property
Successful schemes in 2026 will be those that contribute positively to their surroundings and offer a clear sense of character. This applies as much to refurbished assets as to new developments, where connection to context and community is becoming a key marker of quality.
Overall, the development industry in 2026 will be defined less by innovation for its own sake and more by judgment. Developers are prioritising clarity of purpose, flexibility and long-term relevance – recognising that, in a more competitive and regulated market, enduring demand is created by buildings that work well, age well and belong to their place.
In the year ahead, occupiers are likely to continue to focus more on bespoke and highly flexible space planning, moving away from generic fit-outs that were prevalent before the pandemic. From the landlord perspective, best in class amenities, wellbeing trends and integration of ESG will continue to dominate the office sector in 2026.
We expect to see greater take-up of prime, design-led spaces which align closely with occupier brand identity but can also be rapidly adapted to respond to changing requirements over time, including shifts in working patterns and the employee demands of the workplace. Taking cues from retail, we anticipate seeing the use of “destination workplace” much more commonly.
While this will inevitably mean additional upfront expenditure, it is an approach which creates the employee (and now, brand) experience, not forgetting the war for talent continues unabated. In addition, the growing trend towards the “amenitisation” of the office is likely to see fewer employees working from home in 2026, with attendance creeping up over time across our managed portfolio.
One particular trend we are noticing is how a growing number of Gen Z employees are starting to influence occupier decisions. This generation is increasingly in the driving seat for leading change and will not accept spaces which do not conform to their own longer-term vision of the organisations they work for, not least in terms of more attractive features which support and enhance particular lifestyle choices.
Aspirations for high ESG credentials and a focus on the circular economy will continue to be key factors guiding occupiers and building owners alike
For example, the provision of wellness and gym facilities, cafés, areas for socialising and even on-site access to various forms of healthcare provision. In addition, we will see a greater focus on supporting employees with accessibility, for example through the wider incorporation of standing desks into floorplans.
Nonetheless, offices will continue to provide more traditional spaces to meet and entertain clients as well as offering floorplates which are arranged to maximise views across internal areas and reinforce a sense of ‘neighbourhood’ between all parts of an organisation.
Finally, aspirations for high ESG credentials and a focus on the circular economy will continue to be key factors guiding occupiers and building owners alike. We believe there will be a reduction in the wastage associated with many Cat A fit-outs as occupiers and their advisers seek to find ways of refurbishing spaces which avoid the need for wholescale strip outs and reuse existing materials as far as possible.
Tenants will also become even more reliant on building managers to provide them with operational data in appropriate formats to help them make informed decisions about their own sustainability performance and how it can be better managed.
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