Ryan FowlerNew research indicates that the UK development industry is heading into 2026 with a more stable outlook, but persistent skills shortages and delivery pressures continue to weigh heavily on the sector’s ability to turn ambition into completed schemes.
The Development Index, produced by real estate and construction hiring specialist Cobalt Recruitment, draws on interviews with senior figures across property developers, housebuilders, REITs and investment firms.
The findings point to subdued sentiment through much of 2025, followed by a tentative improvement as the market looks ahead to 2026.
Respondents highlighted softening finance terms, the prospect of further interest rate cuts and anticipated clarity around the National Planning Policy Framework as factors helping to rebuild confidence.
However, these positives are being offset by a range of structural challenges, including prolonged planning delays, constrained project viability, a lack of schemes that meet lender requirements, rising cost pressures and a shortage of end buyers and occupiers.
Staffing challenges remain a central concern. The Index shows that skills shortages across planning, land, development, technical, design, commercial and delivery roles are continuing to slow progress, particularly in specific regions.
Employers are increasingly seeking professionals who can combine technical expertise with commercial judgement, ESG understanding and digital capability, including the use of AI-enabled appraisal and design tools.
The research also notes a growing shift towards refurbishment and regeneration, which now account for more than four fifths of schemes currently underway.
This change is driving demand for specialists with experience in complex retrofit projects, sustainability standards and evolving regulatory requirements, further intensifying competition for talent.
Maria Sinclair, managing director of Cobalt UK, said: “The Development Index highlights a UK development market that remains ambitious but increasingly constrained in its ability to deliver.
“Economic pressures, planning complexity and ongoing skills shortages are emerging as significant risks to progress across the sector.
“Moving from ambition to delivery will require a renewed focus on execution, with investment in skills, stronger development teams and access to the right expertise becoming critical to navigating uncertainty and unlocking growth.
“At Cobalt, we see first-hand how the availability of experienced professionals can accelerate projects and support delivery.
“The Index is designed to support that discussion, setting out the key pressure points and what the industry must address to move forward with confidence.”
The findings suggest that while confidence is slowly returning to the development market, addressing long-standing workforce constraints will be critical if the sector is to capitalise on improving conditions and deliver the volume of homes and commercial space required.
