Following closely on from February’s New Homes Week, the latest Barclays Business Prosperity Index provides timely insight into the health of the UK housebuilding sector. Drawing on anonymised Barclays data from around 70,000 UK businesses, alongside research with 500 industry leaders and 2,000 consumers, it paints a clear picture of resilience and intent.
Underlying confidence is evident with four in five housebuilding firms (83%) feeling positive about the year ahead. In a market still shaped by affordability pressures and close scrutiny around delivery targets, that level of confidence signals a sector that is still investing, still building and still planning for growth.
For the intermediary mortgage market, this is not abstract sentiment. It points to pipeline, stock and buyer activity that can translate into a host of fresh conversations over the next 12 to 24 months.
Early pipeline data shows momentum building
The Index highlights strengthening activity in the early stages of development. Architects recorded a 2.3% rise in incoming cashflows, while quantity surveyors saw an increase of 4.8% between Q3 2024 and Q3 2025. That suggests work is progressing through planning and costing phases, which typically feed into build starts and completions in due course.
There is a split in behaviour between smaller and larger firms. Smaller housebuilders reduced borrowing by 17.7% and increased savings by 3.0% over the same period. Larger firms, by contrast, increased borrowing by 20% and reduced savings by 8.9%, indicating capital is being put to work.
Taken together, this shows caution in parts of the market but also clear commitment to delivery. Leaders across the sector plan to increase total investment by around 38% over the next 12 months, including 42% into marketing, 39% into new equipment and 37% into pay to attract talent.
This investment intent has practical implications as strong levels of marketing spend means more buyer enquiries. More equipment and staff means a push to improve build times and quality, a combination which feeds through to supply and client opportunity.
Technology and modern methods are reshaping delivery
One of the strongest themes in the report is innovation. The average intended investment in artificial intelligence across the sector stands at £441,281 per business. Firms are looking at AI to support design and planning (37%), business management automation (35%) and building information modelling (29%).
Alongside this, 40% are investing in new construction methods to reduce manual labour, while 35% are directing funds towards training and upskilling. Nearly all firms (98%) say aligning with the Future Homes Standard is a priority over the next 12 months, even though 82% acknowledge it will be a challenge.
Higher build standards and greater use of data should result in more consistent quality and clearer information on energy performance. As energy efficiency remains a key client concern, mortgage intermediaries who understand the practical benefits of modern new build homes will be better placed to explain long term running cost savings alongside mortgage affordability.
Demand is clear, especially among younger buyers
On the demand side, the data is equally telling. A quarter of homeowners overall (25%) live in a new build property, but this rises sharply among younger cohorts, with 60% of Gen Z homeowners saying their home was brand new.
This underlines how far new build has come in terms of becoming a considered choice rather than a niche area of the market, particularly for first-time buyers and younger movers. That aligns with wider trends showing strong first-time buyer representation in overall transactions and continued appetite for energy-efficient homes.
With younger buyers valuing certainty on costs, low maintenance and improved EPC ratings, many are also benefitting from builder incentives, shared ownership or lender-led schemes that are common in the new build space.
Bridging perception and reality
The Index also shows a gap between what developers think buyers want and what consumers prioritise. While firms expect demand for customisation and digital infrastructure to shape future schemes, consumers still rank gardens, access to green space and proximity to transport highly.
Of course, there are still barriers. A quarter of housebuilders cite high construction costs as a major constraint, alongside inflation and raw material prices. Smaller builders in particular face pressure from regulation and skills shortages, but the overall tone of the report is one of preparation rather than retreat.
What this means for the intermediary market
A resilient and investing housebuilding sector creates conditions for sustained advice activity. For intermediaries, that means:
• More conversations with first-time buyers drawn to new build stock,
• Greater scope to discuss energy efficiency and total cost of ownership,
• Opportunities to work closely with developers and specialist new build teams,
• The need to stay close to evolving criteria, incentives and product design.
As the government continues to focus on housing supply and standards rise, the new build sector is not standing still. It is adapting, investing and planning ahead. By understanding how the sector is changing and aligning advice to those shifts, proactive intermediaries can position themselves at the centre of a market that remains active and forward looking.
