At Lewis Denley, we closely monitor the evolving challenges and opportunities within the construction and development sector. As we move into 2025, several key themes are shaping the industry landscape. 

Building Safety
The post-Grenfell era has ushered in a transformative building safety regime, yet navigating these changes has proven difficult. Developers face delays with the Building Safety Regulator (BSR) as it grapples with resourcing issues, leading to slower processing of Gateway applications and the registration of higher-risk buildings. 

Spring 2025 will see the Government respond to the Grenfell Phase 2 Report, potentially expanding the definition of higher-risk buildings, a daunting prospect for the already under-resourced BSR. Additionally, the introduction of the Building Safety Levy in Autumn 2025 will add a financial layer to all new residential projects in England. 

Updated fire safety guidance demands industry attention, with expanded standards for residential fire safety becoming a cornerstone for compliance. 

Insolvency Pressures
In 2024, the construction sector recorded over 4,000 insolvencies, marking 17% of all company failures in England and Wales. High interest rates, inflation, supply chain costs, and cashflow issues are expected to sustain this trend in 2025. 

At Lewis Denley, we focus on robust contract negotiations to proactive risk management.  

Sustainability
The ‘UK Net Zero Carbon Buildings Standard’ pilot launches in 2025, providing a much needed framework for defining net-zero carbon-aligned buildings. Despite some criticism for its ambitious targets, this standard signals progress toward embedding sustainability into construction practices, especially within contracts. 

Housebuilding Challenges
While modest growth is expected in housebuilding, resource constraints, particularly skilled labour shortages, pose significant hurdles. Modular construction, once hailed as a solution, has underperformed, leaving the industry searching for viable alternatives. 

Procurement Reforms
February 2025 brings the Procurement Act 2023 into effect, replacing the EU-derived system with a more flexible framework. This reform offers opportunities for innovation in procurement practices but may also pose challenges as authorities experiment with bespoke procedures. 

 The shift away from traditional “design and build” approaches is also noteworthy. With the risks of contractor insolvency and the complexities of the Building Safety Act, 2025 may see a resurgence of traditional procurement and construction management methods. Two-stage tendering, highlighted in the Private Sector Construction Playbook, is expected to gain further traction, fostering early supply chain collaboration. 

Data and Technology
Driven by the Building Safety Act’s Golden Thread requirements, 2025 may herald advancements in data management. Improved digital storage systems can enhance safety, sustainability, and efficiency across the lifecycle of construction projects. 

Emerging Sectors: Data Centres
The designation of data centres as critical national infrastructure has sparked investor interest, with development activity set to grow in 2025. Balancing their significant energy demands with sustainability goals remains a critical challenge for the sector. 

Looking Ahead
Despite ongoing challenges ranging from insolvency risks to regulatory complexities, 2025 offers green shoots for growth and innovation. At Lewis Denley, we remain committed to guiding our clients through these dynamic changes, leveraging our expertise to mitigate risks and seize emerging opportunities. 

For tailored advice and insights, contact our experienced commercial property team.