100-year-old construction giant to stop building homes in UK
100-year-old construction giant to stop building homes in UK
Pui-Guan ManTue, September 15, 2026 at 3:05 PM UTC
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Kier Group is one of Britain’s biggest construction groups, building projects such as schools and hospitals - Mike Kemp/In Pictures
A 100-year-old construction giant will halt housebuilding to focus on road and hospital projects, as the property slump continues to take its toll on the sector.
FTSE 250 builder Kier Group said on Tuesday that from 2027 “there will be no investment in new property developments, with capital reallocated to enhance the group’s balance sheet strength”.
Its portfolio includes more than 5,000 homes, with construction under way on seven sites. It has said it will finish these before exiting property development.
Stuart Togwell, the chief executive, said the property group was taking “important steps to strengthen and simplify the business”.
Kier will instead focus on its infrastructure and construction divisions, citing more growth opportunities.
In particular, the company is expecting “significant revenue growth” from its water, energy, defence and healthcare contracts.
One of Britain’s biggest construction groups, Kier designs and builds various projects, including schools, hospitals, highways, energy projects and waterworks.
These include roles on HS2 and the Sizewell C nuclear power station.
A £55m office in Liverpool and a 9,290 sq m warehousing site in Manchester are also among its existing property developments.
The news will deal a setback to Labour’s manifesto pledge to build 1.5 million homes during this parliament – a target thsat Angela Rayner, the Housing Secretary, admitted on Sunday that the Government had a “slim chance” of reaching.
Construction continues to suffer a slump amid persistently high inflation, rising build costs and weak housebuyer demand.
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Housebuilder MJ Gleeson swung to a loss and cut jobs on Tuesday as the housing gloom continued to take its toll.
MJ Gleeson made a £2.7m loss in the year ending June 30, blaming “subdued” demand for housing. This compared with a £20.5m profit in the prior year.
Graham Prothero, the chief executive, said demand for homes had been hit by an 11-year high in homes for sale in England, rising mortgage rates, and increasing cost of living pressures.
Mr Prothero added that taxes and red tape were making it harder to build homes profitably. The burdens include a building-safety levy to pay for cladding remediation and new net zero rules.
“It is in the gift of this Government to put the brakes on some of those things,” he said. “Now is a very bad time to be imposing the new building safety levy on us ... and the future home regulations [are coming] next year.
“Do we need to do that right now? Could we postpone that and ease the viability challenge? It would be great if we could get some help in that regard.”
The cost of building a new home has risen by £76,000 since 2020, according to the Home Builders Federation. Mr Prothero said half of this was because of increased taxes and regulation.
Under a restructuring at the housebuilder, the company shed 21 jobs after making 56 redundancies while creating 35 jobs.
The group also shut its East Yorkshire office, pulled out of 12 development sites that it had bought and combined its Greater Manchester and Cumbria operations.
Its housing land pipeline has fallen from 19,638 to 14,927 plots.
Mr Prothero said that the “subdued market may not improve any time soon”, so it was taking a “prudent stance” on managing its cash flows. The builder sold 1,968 homes during the year, up 10pc from the previous year.
“You shouldn’t get the impression there are no buyers out there; there absolutely are,” he said. “And we are focusing on what we can do better in order to win over those buyers.”
Source: “AOL Money”
