Credit: Adobe StockConstruction Comeback? Insights from JLL’s UK Construction Perspective 2026
JLL analyses the UK construction sector’s opportunity to overcome economic uncertainty and cost pressures with innovative new procurement approaches
February 19, 2026Real Estate
Written by:Rory Hickman
Key Takeaways
- Early signs of improved construction activity in 2026 suggest a positive shift in global real estate sentiment and an increase in investment.
- Despite optimism, the sector faces rising costs driven by labour shortages, supply chain issues, and a scarcity of key materials.
- New procurement models are emerging to better manage risks and improve project viability in UK construction.
As part of the GRI Institute's Thought Leadership initiative with JLL, we’re pleased to share their latest UK Construction Perspective 2026 report.
Providing valuable insights into the economic and market factors shaping the construction sector in the UK, this research explores both the challenges and opportunities within the industry as it prepares for the next phase of development.
The reduction in interest rates, alongside the ongoing focus on Repair & Maintenance (R&M) works, signals a shift towards enhancing the lifespan of existing buildings and incorporating sustainability targets.
However, despite optimism in some areas, the UK construction sector continues to face seemingly ever-rising cost pressures.
With increased labour costs, supply chain disruptions, and a scarcity of key materials, project costs are expected to rise further in 2026. The impact of these factors on tender pricing and overall construction budgets will continue to influence the delivery of projects across sectors.
Models such as two-stage tendering and alliancing are gaining traction as a way to better manage risks and foster collaboration between stakeholders. These strategies aim to provide a more balanced allocation of risk, offering greater transparency and improving project viability.
Looking ahead, JLL’s UK Construction Perspective provides a comprehensive outlook for the next 12 months, encouraging the industry to adopt innovative strategies to mitigate uncertainty.
The combination of evolving procurement models and a proactive approach to managing risk positions the construction sector for growth, despite the complex challenges it faces.
For more detailed insights and a deeper look into the outlook for the UK construction market, explore JLL’s full report.
Providing valuable insights into the economic and market factors shaping the construction sector in the UK, this research explores both the challenges and opportunities within the industry as it prepares for the next phase of development.
Costly Construction Conditions
One of the key takeaways from JLL’s report is the early signs of improved construction activity in 2026, driven by a positive shift in global real estate sentiment and an anticipated increase in investment.The reduction in interest rates, alongside the ongoing focus on Repair & Maintenance (R&M) works, signals a shift towards enhancing the lifespan of existing buildings and incorporating sustainability targets.
However, despite optimism in some areas, the UK construction sector continues to face seemingly ever-rising cost pressures.
With increased labour costs, supply chain disruptions, and a scarcity of key materials, project costs are expected to rise further in 2026. The impact of these factors on tender pricing and overall construction budgets will continue to influence the delivery of projects across sectors.
Navigating Construction Challenges
In response to these challenges, JLL’s research highlights the emergence of new procurement approaches.Models such as two-stage tendering and alliancing are gaining traction as a way to better manage risks and foster collaboration between stakeholders. These strategies aim to provide a more balanced allocation of risk, offering greater transparency and improving project viability.
Looking ahead, JLL’s UK Construction Perspective provides a comprehensive outlook for the next 12 months, encouraging the industry to adopt innovative strategies to mitigate uncertainty.
The combination of evolving procurement models and a proactive approach to managing risk positions the construction sector for growth, despite the complex challenges it faces.
For more detailed insights and a deeper look into the outlook for the UK construction market, explore JLL’s full report.