High-rise residential construction in Britain remains well below its post-pandemic peak, despite a modest recovery from the low reached last year, as building safety delays and worsening site economics continue to weigh on new projects.
Starts on residential developments of seven storeys or more rose in 2026 Q2, up 26.1 per cent on the previous quarter and 52.6 per cent on the same period a year earlier. But that rebound came from what was described as a very low base, leaving starts still 35.6 per cent below the 2021 average.
The figures mark only a partial recovery from a steep downturn that began after the market peaked in 2021 Q3. Following that high point, starts fell sharply for two quarters as housing demand cooled, according to Barbour ABI, broadly mirroring the wider slowdown in house building.
Unlike the broader housebuilding market, however, high-rise activity recovered from 2023 Q1. By 2024 Q1, starts had climbed back to around 2021 average levels, even as general house building remained subdued through 2023.
That improvement proved short-lived. From 2024 Q2, starts began to fall again, with the decline attributed to a combination of major delays linked to the Building Safety Regulator (BSR) and wider site viability pressures. By 2025 Q2, high-rise residential starts were 73.2 per cent below the 2021 average.
That quarter now appears to have been the low point. Starts have risen since then, but remain weak by historical standards.
Developers say the regulatory backdrop is still a major constraint. While the BSR says it is making progress, the picture on the ground remains difficult. Developers report delays of around five months at Gateway 2 and three to four months at Gateway 3, while rejection rates are still said to be high.
Those pressures are now being compounded by a more difficult cost environment. Since the recent conflict in the Middle East, double-digit inflation in construction product prices, driven by spikes in oil and energy costs, and a sharp rise in financing costs from higher borrowing rates have added to viability concerns. The high level of uncertainty is also expected to weigh on investor appetite for high-rise schemes, raising the prospect of starts falling back again in the second half of 2026 and into 2027.
There has been some shift in activity towards mid-rise housing. Starts on residential schemes of between three and six storeys rose from a low base between 2024 Q2-Q3 and 2025 Q3, as developers moved towards projects seen as offering greater certainty over time and cost, without the same exposure to BSR delays, uncertainty and specification changes.
But that shift was not enough to offset the fall in high-rise building. With fewer mid-rise developments and fewer flats per scheme, the result was fewer new homes overall. Mid-rise starts began to decline again in 2025 Q4 and remained at that level in 2026 Q1, suggesting only a limited shift back towards high-rise so far.
