• June 2025 Spending Review
• MA CPD Morning 2025
• Project Case Study: Central Middlesex Hospital
• Tender Price Index Update
• Project Case Study: Sobell Leisure Centre
• Comprehensive Retrofit Services to Support Your Decarbonisation Strategy
• Constructing Excellence SECBE Awards 2025 Finalist
• The New Procurement Act

June 2025 Spending Review

Like many people in our sector, we had been eagerly anticipating the announcement of the Government’s Spending Review on the 11th of June 2025; we were pleased with the Government’s announcements which support their ambition to deliver 1.5 million homes in this parliament and its emphasis for the whole sector to work together to deliver it.

The Housing Minister, Matthew Pennycook MP, has subsequently written to all registered providers (RPs) of social housing to confirm the announcements, where he outlined that the outcomes from the announcement should:

“enable us to work in partnership to deliver the Government’s commitment to the biggest increase in social and affordable housing in a generation.”

We have picked out our 10 key takeaways from the announcement for affordable housing below:

On development funding:

• £39 billion for a successor to the Affordable Homes Programme (AHP) over 10 years between the 2026-27 to 2035-36 financial years.
• The AHP will prioritise homes for Social Rent but will also fund a mix of tenures including Affordable Rent and Shared Ownership.
• A further £2.5 billion in low-interest loans to support new development, to complement commercial lending.

On rent settlement:

• Social housing rents to increase by CPI+1% each year from April 2026.
• The rent settlement has increased from 5 years to 10 years.
• The implementation of a convergence mechanism as part of the new rent settlement, which will be announced at the Autumn Budget.

On Building safety:

• Social landlords to gain equal access to Government remediation funding (the Building Safety Fund and Cladding Safety Scheme).
• Government to invest over £1 billion in social housing remediation and make it significantly easier for social landlords to secure upfront capital for remediation through Government schemes.

In other crucial areas:

• £950m capital to the Local Authority Housing Fund to support local authorities in England with increasing the supply of better-quality temporary accommodation.
• Future funding information on the Warm Homes Plan to be announced in due course.

We welcome these announcements from the Government, both in terms of the funding that will become available but also their long-term strategy for tackling the housing crisis. We were, however, slightly concerned about the lack of detail regarding the Warm Home Plan and we believe that more money is required to deal with the issues around homelessness and temporary accommodation.

Clearly the Government is concentrating their efforts on helping RPs re-ignite their stalling development programmes by injecting capital through the AHP, giving them long-term certainty over rents and helping them with their expensive building safety programmes.

We believe that the triple commitment on funding, rents and safety is exactly what RPs need to give them and their potential financial partners the long-term certainty needed to invest in delivering affordable homes.

On access to the Building Safety Fund, we believe that this will be a key driver in helping RPs deliver their building safety programmes with RPs being able to bring forward projects which were being held back by financial constraints. This will be essential for resident safety and confidence in the sector.

On delivering new affordable housing, we believe that the above measures mean that there is an excellent opportunity for the sector to work in partnership with the Government and one another to turn these ambitions into a reality.

If you would like to speak to us about our experience in delivering remediation and building safety programmes or the new build development projects we are working on, in partnership and otherwise, please contact us through our website or reach out via ma@martinarnold.co.uk.

Martin Arnold CPD Morning 2025

Earlier this month, we welcomed over 150 attendees to our MA CPD Morning at the British Library Knowledge Centre. The event was a great success, bringing together professionals from across the housing, construction and legal sectors for a morning of thought-provoking discussions and valuable learning.

The morning featured two sessions and a panel discussion, covering important topics affecting the industry with a building safety focus. The speakers assessed both the impact of the Building Safety Act and the Gateways in terms of delivering HRBs. Events like this reflect our continued commitment to collaboration, knowledge sharing and raising standards across the industry.

We’d like to thank everyone who joined us and extend our sincere appreciation to our expert speakers. Chaired by our Directors, Ben Davis, Chris Martin and Roger Arnold, the event featured a fantastic line-up, including Jonathan Corris, Asif Patel and Sasha Pirbhai from Devonshires, Catherine Raynsford from Legal & General, Luke Taylor from Mount Anvil and Charlie Giddens from Newlon Housing Trust.

If you or your team are interested in a tailored CPD session delivered by Martin Arnold, please get in touch at ma@martinarnold.co.uk to arrange a session or to find out more.

Project Case Study: Central Middlesex Hospital

Appointed as Employer’s Agent and Principal Designer, Martin Arnold supported with the delivery of 158 affordable homes, cycle parking, amenity space and landscaped public realm, located adjacent to Central Middlesex Hospital in West London. The development also includes the refurbishment of the Old Refectory, a former Victorian workhouse, to CAT A standard for future B1/D1/D2 use.

Our team supported the client from planning validation through to contract negotiations and completion, managing complex planning amendments and coordinating a re-design of key services to maintain compliance and overcome material shortages.

A detailed CDM Design Compliance Review revealed several design issues including the absence of roof perimeter protection. We advised on solutions to mitigate future post-occupancy liability, ensuring the development met CDM 2015 and Building Regulations.

The residential element was successfully handed over in March, with the refurbished Old Refectory completed in May.

For more details about how we supported this project, you can read the full case study here: https://www.martinarnold.co.uk/project/central-middlesex-hospital/

Tender Price Index Update: June 2025

The UK construction industry continues to experience growth, though the pace remains slower in comparison to previous years. However, the industry remains resilient despite ongoing pressures from persistent inflation, supply chain disruptions and tightened monetary policies.

Total construction output showed no growth between Q1 and Q2 of 2025. During this period, new work increased by 0.9%, whilst repair and maintenance (R&M) fell by 2.1%. However, comparing Q1 2024 to Q1 2025, there was an overall rise in construction output by 0.9%.

Monthly construction output grew by an average of 0.5% in March 2025, driven by a 0.6% increase in new work output and a 0.4% rise in R&M. Whilst new construction projects have flatlined, public and commercial projects are experiencing significant growth, highlighting a positive outlook.

According to the Construction Products Association (CPA), construction output is forecasted to rise by 1.9% in 2025 and 3.7% in 2026. Compared to the last forecast, these figures have been revised to slightly lower by 0.2% and 0.3% respectively. The CPA suggests this is due to a weaker UK economy, high inflation and the higher National Living Wage (NLW) and National Insurance Contributions (NIC).

The private house building industry is beginning to recover, although not without challenges. High mortgage rates, a lack of Government stimulus and delays from the Building Safety Regulators are continuing to impact new housing and build-to-rent development. However, the UK Government’s introduction of the National Planning Policy Framework and progress with the Planning and Infrastructure Bill are promising – unfortunately their effects are unlikely to be realised until 2027. Overall, private housing output is forecasted to rise by 4% in 2025 and 7% in 2026.

Tight monetary policies, high inflation, new legislation and limited access to credit and finance have placed a significant strain on future construction projects.

High interest rates have driven up borrowing costs, impacting the cash flow of upcoming projects. This has led to hesitation among clients to invest, resulting in delays across various developments. With concerns around stagflation, inflation is expected to peak at 3.7% in Q3 2025, before gradually falling to 2.5% in 2026 and 2% in 2027.

In response, the Bank of England has reduced interest rates from 4.75% to 4.5%, aiming to encourage business investment, boost consumer spending and stimulate the overall circular flow of income.

Project pipeline is a growing concern in the new build sector, with a reported 19% decline in planning approvals, meaning fewer PCSA projects are progressing beyond the tender stage. Key factors for this include low contractor confidence and greater diligence around compliance with the Building Safety Act, which is increasing insurance costs and adding delays due to regulatory red tape.

On a more positive note, the Government’s spending review has introduced potential new avenues of funding in a move which is expected to stimulate new projects. However, the limited availability of construction workers, combined with rising demand and stagnant supply, is likely to drive labour costs even higher.

Tender prices continue to rise with the BCIS tender prices increasing by approximately 0.5% between Q4 2024 and Q1 2025, contributing to an annual growth of 2.3% in the BCIS All-In Tender price index (TPI). While this marks an increasing trend, it remains significantly below the peak growth rate of 10.3% observed in the second quarter of 2022.

Recent changes in Building Regulations and ongoing labour shortages are contributing to rising tender prices, adding further pressure on project costs. In April 2025, rises in employees’ NIC and the NLW have impacted labour costs. The BCIS Labour cost index is forecasted to increase by 18% overall by Q1 2030. On a positive note, material cost inflation has been stable since peaking in 2022.

Whilst multiple factors contribute to rising labour costs, a key driver is the increasing demand for skilled labour. As the industry takes on more complex and specialised projects, the need for highly skilled workers grows. However, a shortage of such labour is intensifying competition amongst stakeholders, pushing demand upwards whilst supply remains constrained. This imbalance is fuelling a significant rise in labour cost inflation, with firms needing to offer higher wages to attract and retain talent in an increasingly constrained labour market.

Project Case Study: Sobell Leisure Centre

Following severe flood damage caused by a burst water main in 2022, Martin Arnold were appointed to lead the refurbishment and internal remodelling of the Sobell Leisure Centre in Islington. The centre was originally opened in 1973 and designed by Richard Seifert Partnership; Sobell serves as a vital community hub welcoming over 500,000 visitors annually.

Our team provided Architectural and Construction Management services to deliver modern, inclusive spaces that reflect the community’s evolving needs. Works included transforming the former ice rink into a 200-capacity soft play zone and creating a new cafe area for visitors. The sports hall was subdivided to host multiple disciplines, while the trampoline park was upgraded to accommodate up to 350 users and now features a new zipline.

A key challenge involved upgrading the building’s fire safety provisions – particularly the integration of a 15-metre partition wall within the sports hall, requiring precise planning to meet stringent standards. With parts of the centre remaining open during the works, careful coordination and phased delivery were essential to ensure health and safety throughout.

Read more about the transformation here: https://www.martinarnold.co.uk/project/sobell-leisure/

Comprehensive Retrofit Services to Support Your Decarbonisation Strategy

With the Warm Homes: Social Housing Fund Wave 3 now allocated, it is an ideal time to start advancing your retrofit strategies, alongside your other planned investment and Building Safety programmes.

At Martin Arnold we offer a full multidisciplinary service which can be tailored to the needs of each of our clients. From early-stage stock assessments to project delivery and resident engagement, our team are qualified, experienced and committed to supporting you in delivering practical and effective retrofit solutions.

Internally, we have trained Retrofit Coordinators and a Certified Passivhaus Designer. We have also built up a trusted network of PAS consultants and retrofit specialists who support us in offering a fully integrated, compliance service tailored to your assets, your residents and your long-term sustainability objectives.

Our experienced team and partners can support you with:

• Stock condition review and whole-dwelling assessments (via PAS 2035-accredited consultants)
• Procurement strategies
• Retrofit coordination and design advice
• Energy modelling and scenario planning
• Retrofit contract administration and project delivery
• Resident engagement and post-occupancy evaluation

We understand that successful retrofit isn’t just about improving EPC ratings — it’s about delivering practical, long-term solutions that are cost-effective, PAS 2035-compliant and aligned with your net zero ambitions. Our approach is collaborative, hands-on and focused on results.

We’ve supported retrofit programmes from pilot projects to multi-year schemes, helping housing providers and local authorities develop fabric-first strategies that are cost-effective, PAS 2035-aligned and focused on long-term impact.

Retrofit is fully integrated into the way we work. Our specialists collaborate with Building Surveyors, Architects, Cost Consultants, Project Managers and Health and Safety consultants to deliver a cohesive, expert-led service that blends technical insight with hands-on delivery.

If you’re planning your next retrofit project, or simply want to explore your options, we can support you with a range of services. Find out more about how we can help here or get in touch here.

Plashet Road Named as a Finalist at the Constructing Excellence SECBE Awards 2025

We are excited to share some fantastic news! Our Plashet Road project has been shortlisted as a Finalist at the Constructing Excellence SECBE Awards 2025 in the Residential Project of the Year category.

Martin Arnold provided Employer’s Agent, Quantity Surveying, Party Wall Surveying and Principal Designer services on this flagship mixed-use development in Plaistow, featuring 65 Affordable Rent homes and a nursery facility on an infill site. This fully Passivhaus Certified project was designed by Levitt Bernstein and supported by Sustainability Engineers Etude. The scheme aims to alleviate fuel poverty by reducing energy bills and enhancing the local housing supply in Newham.

Bugler Developments Limited were the Principal Contractor, with engineering support from Synergy and Warm.

A great project which offers high-quality affordable homes and extensive social value within the community.

For more information about the project, please visit: https://www.martinarnold.co.uk/project/plashet-road/

The New Procurement Act

The new Procurement Act came into force on the 24th of February 2025, introducing a regime focused on delivering greater transparency and value for money in public sector procurement. In this article, we look at some of the changes for above threshold procurement processes and what they might mean for our clients. However, we recommend all our clients seek expert legal advice on these legislative changes.

Central Digital Platform (CDP)
Following the UK’s exit from the European Union, the Find a Tender Service (FTS) replaced the Official Journal of the European Union (OJEU) process, enabling contracting authorities to publish high value public sector contracts. An enhanced FTS, known as the Central Digital Platform, has been introduced under the new regime which requires suppliers to upload limited information to the portal including company accounts.

Market Engagement
Market engagement is permitted under the new Act, helping contracting authorities to tailor their procurement processes to their strategic goals. A Market Engagement Notice will need to be published before the tender goes live. If the contracting authority does not publish this notice, they must explain in their tender notice why this has not been done. The same as under the old regime, the purpose of market engagement should be to inform the procurement process.

Procurement Procedures
The new Act allows for three procurement procedures:

• The Open Procedure still exists and functions in much the same way it did under PCR 2015, however, stipulated time limits no longer exist and instead, contracting authorities are asked to set their own based on several factors outlined in S54 of the Act.
• The Competitive Flexible Procedure aims to provide contracting authorities with greater flexibility to design procurement procedures in a way that suits their objectives. This is likely to encompass some of the procurement procedures that existed under PCR 2015 while contracting authorities familiarise themselves with the new rules and consider alternative ways of running procurement.
• Direct Award is also available to contracting authorities, however, under the new rules, a Transparency Notice will have to be uploaded to the FTS to explain the rationale behind this. Whilst this was optional under PCR 2015, this is now a compulsory requirement.

Frameworks
Open Frameworks have been introduced, allowing contracting authorities to admit new suppliers during the lifetime of a Framework. For Open Frameworks with more than two suppliers, the Framework must be reopened within the first three years of its term and again within a five-year period. For Open Frameworks with less than one supplier, the Framework will need to expire after four years. Those with more than one supplier have an eight-year time limit.

Additionally, Dynamic Purchasing Systems are now called Dynamic Markets. They are still dynamic in that suppliers can be admitted at any point, however, the new rules have expanded what can be procured through them. There are now no limits on the type of procurement that can be run through a Dynamic Market.

Tender Assessment
Tenders will now be assessed on the basis of Most Advantageous Tender (MAT) as opposed to Most Economically Advantageous Tender (MEAT). We are yet to see what sort of changes this might bring but it may encourage a greater focus on quality and social value.

Procurement Notices
To improve transparency in the sector, a number of new notices will need to be published under the Procurement Act 2023. These include:

• Transparency Notice: Where a contracting authority plans to direct award a contract, a Transparency Notice will need to be published. These exist under the old regime but were published on a voluntary basis – the new rules make this a compulsory requirement.
• Pipeline Notice: For any contracting authority with a spend of more than £100m, a Pipeline Notice will need to be published at the start of each financial year. This will need to include public contracts with an estimated value of more than £2m.
• Contractor Performance Notice: Contracting Authorities will now have to provide KPI data on suppliers working on a particular contract. This notice will also cover if a supplier has breached a public contract, resulting in a termination, or if the supplier is not performing on the contract.

Debarment List
A new Procurement Review Unit has been introduced with the goal of having greater oversight of contracting authorities and dealing with those who are not following the legislation. For those who consistently fail to follow the legislation, they will be added to a debarment list meaning they will be excluded from bidding for public contracts.

If you would like to discuss procurement in more detail, please contact us at ma@martinarnold.co.uk, where we would be happy to assist with your enquiry.