UK office construction output falls in 2025: pipeline and demand signals for project teams
Reviewed by Joe Ashwell
First reported on The Construction Index
30 Second Briefing
UK office construction output fell 20% in 2025 to £10.2bn, with only 152 new contracts worth £2.7bn let in the first five months versus 185 worth £3.9bn a year earlier, signalling further tightening in 2026. Completions in 2026 across the Big Nine cities are forecast at just 694,000 sq ft, far below the 2020–24 average of 2.2 million sq ft, while UK-wide pipeline equates to only 1.3 years of Grade A supply under construction. City of London prime rents exceeded £100/sq ft after a 6.8% rise, with Grade A vacancy in core locations reported as low as 0.5–2.2%.
Technical Brief
- Barbour ABI attributes sub-trend starts to planning constraints plus elevated build and financing costs.
- Only 152 office contracts were let in the first five months of 2025, worth £2.7bn.
- The same period in 2024 saw 185 contracts awarded, totalling £3.9bn of office work.
- Savills data shows City of London core Grade A vacancy at 2.2%, indicating near-full occupation.
- Other sources report Grade A availability in City and West End dropping below 0.5% in Q4 2025.
- Across the Big Six regional cities, Grade A availability is just 3.6%, with new-build vacancy 1.1%.
- Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester have recorded cumulative prime rental growth of 37% since 2019.
- Barbour ABI notes demand concentrated on “well-located, ESG-compliant” Grade A stock, intensifying competition for modern space.
Our Take
The combination of a 20% fall in UK office construction output with City core Grade A vacancy at 2.2% and Grade A availability at 0.5% signals a tightening pipeline that is likely to support further rental growth for best-in-class space through 2026, even if broader commercial construction remains subdued.
Across the Big Six regional cities, Grade A availability at 3.6% and new-build vacancy at 1.1% suggest that contractors and developers with live schemes are operating in landlord-favourable conditions, which can justify higher specification and retrofit-heavy designs rather than value-engineered shells.
Savills’ appearance here and in the Nottingham Forest City Ground expansion piece in our database underlines that advisory houses with strong UK planning and valuation teams are increasingly central in both commercial office and stadium-led regeneration projects, giving them a system-wide view of construction cost and funding constraints.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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