UK Office Construction Hits 10-Year Low: What It Means for the Building Industry & UK Plant Hire Companies

The UK’s office construction sector has reached its lowest level in a decade, with new development starts plunging to a 15-year low. According to recent analysis by CoStar, only 23 million sq ft of office space is currently under construction, a drop of over three million square feet in the last 12 months. This marks the slowest pace since 2015, when the industry was still recovering from the global financial crisis.

Why Is Office Construction in Decline?

There are several reasons behind this significant slowdown:

• High borrowing costs: Interest rates have risen substantially, making development loans more expensive and putting a brake on speculative builds.

• Elevated building costs: While materials inflation is easing, labour shortages, compliance expenses, and contractor selectivity are keeping tender prices high.

• Remote and hybrid working: Perhaps most notably, the shift towards working from home has reduced demand for traditional office spaces. Many businesses are downsizing or rethinking how they use office environments altogether.

What’s Growing in the UK Construction Market?

Despite the slowdown in office development, the UK construction industry is seeing strong activity in several key sectors:

1. Residential Extensions and Home Improvements

With more people working from home, there’s been a surge in home extensions, garden rooms, and conservatories. Many UK homeowners are investing in extra space, whether it’s a home office, larger kitchen, or garden studio. This uptick benefits plant hire companies by increasing demand for:

• Mini excavators for digging foundations

• Dumpers for soil removal

• Telehandlers for lifting materials 

2. Life Sciences & Tech Innovation Hubs

Cities like Cambridge and Oxford are bucking the office-building decline, with over 1.8 million sq ft of space under construction. Developers are targeting demand from the tech, R&D, and university spin-off sectors, and speculative projects like Botanic Place in Cambridge are going ahead with full momentum.

These modern, high-spec sites require versatile machines such as:

• Tracked excavators for groundworks

• Articulated dumpers for moving materials

• High-reach telehandlers for steel frame assembly

H. E. Services (Plant Hire) Ltd offers a wide range of these machines, ensuring site managers can access the right plant equipment for any stage of construction.

3. Infrastructure Projects

National infrastructure projects remain a core area of growth, including road upgrades, green energy installations, and logistics hubs. These projects are helping sustain demand across the broader construction plant market.