London’s construction sector is in a better position than expected after the Autumn Statement, despite short-term uncertainty caused by the budget leak, according to Rider Levett Bucknall’s (RLB UK) latest Construction Market Intelligence (CMI). 

The independent built environment consultancy reports that falling gilt yields have improved financing conditions, offering developers welcome relief as they move into 2026. 

However, higher taxes on dividends, savings and property income continue to constrain viability across several residential-led sectors, including build to rent, private sale, purpose-built student accommodation, and tall, complex buildings that already face heightened cost and risk profiles. 

Sam Boddy, an RLB associate based in its London office, said: Despite the uncertainty leading up to the Autumn Statement, London’s construction market has held firm. Financing conditions have improved and the core sectors driving London’s growth, particularly life sciences, data centres and prime offices, remain resilient. 

The real challenge now is unlocking scheme viability in an environment where labour and regulatory costs continue to rise. This is where intelligent design optimisation and early supply chain engagement will be critical. London is stable but making projects stack up will require sharper focus than ever. 

The report continues that, with softening real-income growth and no new stamp duty support, private residential activity is expected to remain subdued. 

By contrast, data centres, life sciences, and prime central London offices stand out as comparatively resilient. These sectors are benefiting from strong occupier demand, helping support new development and refurbishment activity. 

Across all London schemes, project teams are being encouraged to prioritise design optimisation and efficiency to unlock viability in challenging conditions. 

The consultancy adds that London continues to be viewed as a mature and stable market but one without clear catalysts for rapid near-term growth. 

Overall, the capital’s construction landscape remains steady and resilient, with “business as usual” heading into 2026. 

RLB’s CMI shows only marginal movements in London tender price inflation: 

• Forecasts for 2025 have seen a slight uplift from 3% to 3.25% 
• Forecasts for 2026 have remained the same at 3.50% 

Across the UK, near-term market conditions remain challenging as rising input costs, including higher wage rates, continue to place pressure on contractors and outpace tender price movements. 

RLB’s CMI shows only marginal movements in national tender price inflation: 

• Forecasts for 2025 have seen a slight uplift from 3.03% to 3.17% 
• Forecasts for 2026 have eased marginally from 3.41% to 3.27%