"What housebuilders need now is certainty - clear regulation, stable policy and practical guidance. Once that arrives, the sector will move quickly."
- Martin Benn - Eurocell
Housebuilders entered early 2025 facing several overlapping challenges. High interest rates continued to suppress buyer demand, while material inflation, energy costs and ongoing labour shortages placed added strain on project viability. Although some pressures have ‘eased’, conditions remain difficult across much of the sector.
Many developers began the year with cautious optimism, expecting activity to strengthen in the second half of 2025. That recovery did not materialise. According to Eurocell’s head of new build, Martin Benn, a combination of subdued consumer confidence, persistent cost pressures and delays within the planning system created a tougher operating environment than anticipated and held back any uplift in activity.
“Affordability remains the biggest barrier,” Benn. “Without intervention to stimulate demand, and with borrowing still expensive for both buyers and developers, we’ve seen momentum stall. The appetite is there, but the conditions simply haven’t aligned.”
Regulation remains the key uncertainty
Regulation has continued to weigh heavily on the sector. The 2021 uplift to Approved Document L required a 31 to 35% reduction in CO₂ emissions compared with previous standards, increasing build costs through measures such as enhanced fabric performance, higher-performing windows, improved airtightness, PV arrays and mechanical ventilation.
Looking ahead, ADL 2025 is expected to form part of the forthcoming Future Homes Standard, which is anticipated to come into force soon. The new framework targets a 75 to 80% reduction in whole-house emissions. While the final detail is still awaited, the changes are expected to significantly tighten performance requirements and influence specification decisions across the industry.
However, continued delays to the publication of ADL 2025 have left developers unable to plan specifications, pricing or product selection with confidence.
“Developers are effectively planning blind,” noted Benn. “Multiple parts of the building regulations, L, F, O, B and M, don’t currently harmonise, and consultation documents have lacked detail. Uncertainty slows delivery, increases cost, and introduces risk into every step of the process.”
Eurocell expects the release of ADL 2025 to trigger a period of rapid technical reassessment, as housebuilders look for marginal gains in U-values and other performance criteria to achieve compliance. As a result, technical teams are likely to play a more central role in helping developers balance regulatory requirements with commercial viability.
Building safety and sustainability continue to evolve
Beyond energy performance, the Building Safety Act continued to reshape responsibilities and liabilities during 2025, particularly for mid- and high-rise schemes. Benn notes that the additional accountability introduced by the Act is already influencing market behaviour.
Benn added, “We’re seeing more scrutiny, more documentation, and a higher bar for product evidence. For some suppliers, that burden may prove too heavy. For others, it’s an opportunity to demonstrate robustness and technical credibility.”
Sustainability is also advancing at pace. The growing use of Environmental Product Declarations is improving transparency around materials, allowing recycled content and embodied carbon to be assessed more clearly. Eurocell expects sustainability data to become an increasingly important factor in specification decisions through 2026 and beyond.
Looking ahead to 2026
Despite the challenges of 2025, Eurocell sees scope for cautious optimism as the sector moves into 2026. Greater regulatory clarity is expected to unlock delayed schemes and allow developers to progress with more confidence. A stabilising economic outlook, combined with rising demand for high-performance materials, may also open up new opportunities for manufacturers.
“The industry is resilient,” Benn concludes. “What housebuilders need now is certainty - clear regulation, stable policy and practical guidance. Once that arrives, the sector will move quickly. Our focus at Eurocell is on supporting that transition with the right technical expertise, product development and data to help our customers meet the next stage of change.”
