There are no incentives to buy or move home, Rachel Reeves warned
Chancellor Rachel Reeves has been warned there are no incentives for people to buy or move home and that the Labour government needs to take action to ‘tackle the malaise’ in the building materials industry.
John Newcomb, CEO of national trade body BMF (Builders Merchants Federation), added that “immediate intervention is now needed to thwart long-term stagnation” as Reeves prepares to deliver her second Budget next month.
His comments come as a new report from the BMF revealed ‘stalled recovery, stagnant consumer spending and severe regional disparities’ in a market considered a key economic bellwether.
The figures reveal two consecutive quarters of value growth of only 1.9 per cent for the first six months of 2025 compared to the first half of 2024, driven by increased volume (four per cent), as prices were down by two per cent.
‘The outlook is far from certain’, Reeves told
The BMF has members with combined sales of £51.6bn and who employ nearly 198,000 people.
Newcomb said: “While these figures confirm sales growth for the second successive quarter, following two years of consistent declines, the outlook is far from certain.
“Over the last two years, a pattern of inactivity has emerged, which is a concern not only to this market sector, but to the wider UK economy.
“The issue is compounded by the fact that while market volumes have been boosted by the dry and hot Spring season, which led to an extension of decent weather into the summer, sales values have been lacklustre due to the deflationary environment we are currently experiencing.
“It seems that everyone is waiting for the confidence to commit to new projects, but interest rates, mortgage costs, and economic uncertainty have frozen consumer activity.
“People aren’t spending and currently there’s nothing happening that’s going to kickstart the market.
“There are no incentives to buy or move home, while the cost-of-living crisis means that, increasingly, consumers are saving for emergencies rather than bigger investments in their properties.”
‘If the UK isn’t building, the nation’s wider economy isn’t moving forward’
The BMF is now calling for government intervention to “kick‑start consumer spending, drive demand, improve housing stock and balance out the pattern of regional differences emerging across the UK”.
Newcomb added: “Without government intervention, our sector will continue to reflect the malaise of the broader economy and risks an extended period of stagnation.
“If the UK isn’t building, the nation’s wider economy isn’t moving forward, but government incentives and a national retrofit strategy could redress the balance of market demand.
“Such action would stimulate the market and ultimately support the government’s house-building plans.
“It could also tackle regional variances which have seen the North East outperform London for sales growth of building materials in the latest BMBI report.
“This divide highlights the growing disparity in confidence and investment across the UK, and the inability of market forces alone to rebalance demand.”
Figures from the latest BMBI report follow the July S&P Global UK Construction Purchasing Index (PMI) survey data, which revealed that UK construction activity had fallen at its sharpest rate in over five years.
Newcomb said: “The PMI reported a considerable slump in the UK construction sector at the start of the third quarter, with total industry activity levels falling at the steepest pace since May 2020, the height of the Covid pandemic.
“When consumers and businesses feel optimistic about the economy, they are more likely to spend and invest, fuelling growth and job creation, but the current climate of uncertainty is constraining the conditions required for sustained growth.”