The UK construction sector has long served as a cornerstone of national prosperity, driving infrastructure projects, housing growth, and commercial development and the current environment signals that it could be a highly favourable time to either enter or expand within the industry. Read Altius Corporate Finance’s take on buying a UK construction business.
Strong Government Support: Infrastructure and Housing Commitments
Government backing remains one of the most compelling reasons to invest in UK construction today.
The UK’s Infrastructure Investment Bill is set to inject additional funding into the sector, reinforcing construction as a national priority. Major schemes currently underway include HS2, Crossrail, Heathrow Airport’s expansion, and the Thames Tideway Tunnel.
Moreover, urgent repair needs are adding to demand. According to the National Audit Office, around £22 billion is needed to address unsafe cladding, while Construction Index estimates £118 billion will be required to upgrade buildings to the government’s new Energy Performance Certificate (EPC) standards.
In housing, the government has pledged to deliver 1.8 million new homes before the end of the current Parliament. Chancellor Rachel Reeves has reaffirmed that boosting homebuilding is a core policy to stimulate growth. Given the UK’s deep-seated cultural attachment to homeownership, demand for residential property is expected to remain robust – a strong growth lever for construction companies, especially those specialising in housing.
Encouraged by these initiatives, the UK construction market is forecast to achieve a compound annual growth rate (CAGR) of 4.3% between 2025 and 2034.
Major Regional Construction Business Growth Drivers
The outlook for construction is bright across the UK’s regions, with forecasts from the Construction Industry Training Board (CITB) suggesting widespread expansion between 2025 and 2028:
- Scotland: Expected output growth of over 2% annually, driven by projects like the £200 million Scottish Gas Networks replacement.
- Northern Ireland: Leading with a projected 2.8% growth, supported by large-scale developments such as the £380 million Strule Shared Education Campus.
- Wales: Set for a significant uplift with the £590 million A465 Heads of the Valleys road upgrade.
- England:
- East and West Midlands: Experiencing strong momentum through transport upgrades and urban regeneration, including the Midland Main Line improvements and Birmingham’s £1.9 billion Smithfield redevelopment.
- East of England and Greater London: Expected to grow close to 3% annually, powered by landmark projects like the £20 billion Sizewell C nuclear facility and the £8 billion Thamesmead regeneration.
- North West and Yorkshire & the Humber: Seeing major transformations with initiatives such as the £1 billion Bolton Town Centre plan and the Full Sutton prison development.
- South East and South West: Major projects include the £8.2 billion Lower Thames Crossing and the £25 billion Hinkley Point C nuclear plant.
- North East: Moderate but steady growth led by initiatives such as the £475 million Crown Works TV and film studio in Sunderland.
Key Industry Trends: Sustainability and Technology Innovation
Several critical trends are reshaping the construction landscape:
- Sustainability: Low-carbon construction methods, material reuse, and smart city development are becoming standard practices.
- Technological Advancements: Greater use of construction management software, drones, robotics, and prefabricated modules is improving efficiency, cutting costs, and enhancing safety.
- Safety Improvements: Upgrades in personal protective equipment (PPE) and on-site practices are helping firms create safer work environments.
Firms embracing these innovations are poised to capture greater market share and build resilience.
Labour Shortages: A Persistent Challenge for Construction Businesses
The sector continues to grapple with a shortage of skilled labour.
The government has pledged to train up to 60,000 new workers by 2029, yet the Construction Industry Training Board estimates a further 251,500 construction roles will need to be filled by 2028.
When evaluating a business for acquisition, investors must scrutinise how effectively it attracts, trains, and retains skilled workers, an increasingly critical determinant of operational strength.
Compliance and Regulation: An Essential Due Diligence Focus
Stringent compliance requirements must be at the forefront of any acquisition:
- Construction Skills Certification Scheme (CSCS): Ensures that workers meet minimum safety and competency standards.
- Licensing for Heavy Machinery: Separate certifications are required for operating specialised equipment.
- Workplace Health & Safety: Under the Health and Safety at Work Act 1974, firms must implement robust safety procedures and provide appropriate PPE.
- Building Regulations: Companies must meet standards relating to structural integrity, fire protection, and energy efficiency.
- Building Safety Act 2022: Introduces continuous monitoring of high-risk buildings from the design phase through to occupancy, enforced by the Building Safety Regulator.
- Environmental Legislation: Firms are expected to minimise environmental impacts and adopt greener building practices.
Non-compliance in any of these areas can lead to heavy fines, costly remedial work, and reputational damage.
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Operational Model: The Importance of Subcontractor Networks
Most construction companies operate with a heavy reliance on subcontractors to deliver specialist work – from electricians and plumbers to structural engineers.
While subcontracting offers flexibility and scalability, it also introduces potential vulnerabilities if third parties underperform or breach compliance. A strong, reliable network of subcontractors is a significant asset and a crucial consideration when evaluating a business for acquisition.
Why Now, Why Choose Altius Corporate Finance
The construction industry’s foundations remain solid, underpinned by government investment, housing demand, and regional development.
For strategic investors, now is a highly advantageous moment to acquire a construction company – provided they perform rigorous due diligence on compliance, workforce capability, and operational resilience.
Conversely, for business owners contemplating retirement or a new venture, the coming months offer an excellent opportunity to capitalise on a buoyant market, particularly ahead of the upcoming changes to Business Asset Disposal Relief in April 2026.
Altius Corporate Finance is ideally positioned to assist buyers and sellers alike. Our expertise in managing business transactions ensures that clients secure maximum value while navigating the complexities of today’s evolving construction landscape. Contact us today for your next M&A move.
