SME Construction data casts doubt on UK ability to hit 1.5 million homes

The UK construction sector is facing significant challenges, with a 15.8% rise in firms in critical distress in Q2 2025, according to Begbies Traynor. Cost pressures from environmental regulations and taxes are hindering growth, while the industry stagnated in Q1 2025. Experts warn that without urgent reforms, the UK will miss its housing targets and risk losing vital infrastructure capabilities. The government's housing push may lead to overtrading, as firms struggle with planning, delivery challenges, and ongoing cost pressures, including skills shortages and inflation.