According to the latest market survey from consultant Gleeds, contractors are continuing their retreat from high risk, with 57% admitting they’ve reduced appetite for risk this quarter.

Around three-quarters revealed that had walked away from tenders – up from two-thirds a year ago.

Pre-construction periods are also dragging out, with deals that once took 12–18 months now stretching beyond two years in many regions.

Gleeds warns the combination of jittery investor confidence, tighter development finance and regulatory delays such as Gateway 2 is slowing schemes before they even break ground.

Margins built into bids are moving upwards too, rising from 5.7% in Q1 to 6.3% in Q3 – with consultants warning they could soon push towards the 7% threshold as costs continue to bite.

One contractor said: “Increases in contractor National Insurance costs are being passed directly on to the client/end user.”

Another warned procurement rules and policy add-ons were making schemes unviable: “Given current budget constraints we need to be looking at UK government policies that are not adding value or social good, and removing them from tenders to allow a sporting chance of contracts being awarded within budget.”

The report also found that while delays linked to the Building Safety Regulator have eased slightly – dipping from 37% of projects in Q2 to 25% in Q3 – residential schemes in London are still being hit hardest.

Confidence in the sector has also taken a knock. Fewer than half of respondents now feel positive about the industry’s direction, compared with 70% when Labour came to power pledging to “get Britain building again”.

Brian McArdle, Gleeds’ UK managing director, said: “Our Market Report shows a fragile but gradually stabilising picture of construction under a Labour government.

“The sector continues to come under strain from insolvencies, inflation, and labour pressures, but opportunities do exist in public housing, healthcare, education, infrastructure and commercial – success will depend on converting government spending commitments in these areas into real project delivery, while safeguarding supply chain resilience.”