Manchester construction starts drop for second year running as headwinds bite
Just 17 schemes broke ground in Manchester and Salford in 2025, down from a record low of 20 the year before. However, pipelines across all sectors remain chunky, according to Deloitte’s annual crane survey.
Seven residential schemes began construction in 2025, including Latimer’s long-awaited Brewery Gardens, four fewer than 2024.
As a result, the number of homes under construction across Manchester and Salford dropped to 8,023, the first time it has dipped below the 10,000 mark since 2016, according to Deloitte’s data.
John Cooper, real estate and infrastructure partner at Deloitte, said regulatory hurdles, including the Building Safety Act and inflation, were playing their parts in suppressing activity.
“Manchester’s residential sector continues to be a key enabler of significant population growth in the city centre, yet faces a critical balancing act,” he said.
“While 2025 saw reduced activity due to inflationary pressures and regulatory changes impacting construction timescales and market confidence, residential construction levels remain strong, reflecting the city centre’s enduring appeal as a beacon for investment and regeneration.”
Latimer’s Brewery Gardens was one of seven resi schemes to start on site. Credit: via Clarion
Residential completions were also down, with 3,422 units handed over in 2025 compared to 4,400 in 2024.
However, 5,500 residential units are expected to complete in 2026, the highest figure since Deloitte’s crane survey began. A further 15,332 homes have planning permission.
“A robust pipeline for 2026 should support continued strong levels, though a more cautious and selective approach from investors means developers must work harder on their proposals,” Cooper said.
“Public sector funding will also be crucial in unlocking projects that support ‘good growth’ amidst ongoing headwinds. A focus on further investment, timely decision making, and labour force skills are essential to driving construction activity.”
The student accommodation market picked up in 2025 with four new starts, taking the total number of PBSA schemes on site to five.
After a barren few years for PBSA delivery – 2023 and 2024 saw no units delivered – 2025 saw 1,803 units completed, including Vita Group’s House of Social at First Street.
Manchester’s PBSA pipeline remains robust with various large developments emerging or securing approval last year. These include Unite and MMU’s Cambridge Halls redevelopment and IQ Student Accommodation’s 2,500-unit reimagination of its Weston Hall and Pendulum Hotel site on Charles Street, which features a 50-storey tower.
Away from residential, three hotel projects started on site last year, up from just one in 2024. The trio of projects – including the W at No2 St Michael’s – brings the number of rooms under construction to 1,621, while 391 new rooms – including Treehouse on Deansgate – were completed in 2025.
There was a welcome return for office development after no new starts in 2024, with Landsec taking the plunge at Mayfield.
The 243,000 sq ft Republic contributes to an accumulated 821,000 sq ft under construction, much of which is refurbishments.
Last year also saw a 17-year-high 1.26m sq ft of office space complete, including No1 St Michael’s, which is fully let, and Island on John Dalton Street.
Overall, there was a 47% drop in office space under construction year-on-year.
There is a further 5.34m sq ft of consented workspace in the pipeline, according to Deloitte.
Landsec’s Republic was the only new-build office scheme to start on site. Credit: Assembly Studios
“Manchester’s commercial office market is characterised by strong demand and low prime vacancy rates,” Cooper said.
“Despite challenges in new supply due to increased capital costs and construction inflation, the market is responding strategically. This includes a focus on high-quality refurbishments, which are meeting demand for flexible workspace alongside more traditional lettings.”
He added: “A combination of these strategic projects and public-private funding models, including support from the Greater Manchester Good Growth Fund, will be crucial for meeting demand and unlocking future development.”
Reflecting on Deloitte’s study, Manchester City Council Leader Cllr Bev Craig said: “The annual crane survey is a useful tool in that it tells the story of our growth, it shows that we are building the right things that help our residents to thrive, and that there is high confidence in our city so investors deliver amazing developments here.”
The Manchester Crane Survey is part of Deloitte’s Regional Crane Survey series, which monitors construction activity within four UK cities, across a range of sectors including office, residential, hotels, retail and leisure, education and student housing.
Across all surveys – Belfast, Birmingham, Leeds and Manchester – 53 new construction starts were recorded in 2025 compared to 47 in 2024.
Of the four cities, only Leeds recorded an increase in construction activity, jumping from eight to 11.
There is a limit to how much you can build and for how long
By Graham
The resistance to building anything substantive outside of the Mancunian Way must keep the construction industry up at night.
By Anonymous
The bubble has very obviously burst and for quite some time – plenty of PR waffle papering over cracks last year but just look at the dwindling amount of proposed skyscrapers in 2025: Stocktons, Red Bank, Riverside Place, the ~Charles Street couple, and…that is about it. Conveniently omitting the Birmingham Survey numbers where their dev/crane counts have shot up in the past two cycles. Is HS2 the cause? Who knows for sure, but the timelines certainly align.
By S
The commentary from Deloittes in this article papers over the very significant viability challenges both commercial and residential developers have been confronted with for new build developments. Those challenges combined with the debacle of the Gateway 2 stewardship by the Building Safety Regulator have and will have an impact over the next 12 to 24 months.
The very welcome Burnham £1b “Good Growth Fund” will help but don’t expect an overnight transformation.
By Anonymous
Sorry S , I know it’s a hard cope but Manchester has for many years outstripped Brum in hotels , offices, apartments, transport infrastructure and almost every metric worth mentioning, you only have to look at the last years report to show that office growth was as great as Brum and Leeds combined . it’s hardly a surprise if this year is not as stellar as that ..can’t have that kind of growth every year. Cheers up though, you’re doing well too 😉
By Anonymous
Construction activity in Manchester and Salford declined again in 2025, with just 17 new starts, the lowest figure in several years. I recently commented on the Bernstein legacy and how its momentum would sustain the city for a little while longer, but would ultimately lose steam if our current leadership prioritised ideology over pragmatism. While the development pipeline remains healthy, the question is whether investor confidence will hold; current economic indicators suggest otherwise. Inflation, steep material cost increases, unresolved regulatory challenges, and a largely untested City Council all add to the headwinds, making the path forward increasingly difficult.
By Steve5839
A good chunk of the building has been on railway or industrial land; the former is largely gone, the latter compressed and excess used up – are they expecting to just keep knocking down and rebuilding in perpetuity ?
By John Smith
@ S – wishful thinking from you. I can think of about 10 towers that are about to start this year. Jesus Manchester has a quiet year by its own standards and all of a sudden the bubbles apparently popped. No chance.
By Bob
Whilst there has been a lack of new proposed developments, more worrying is the failure of plans previously agreed by planning to proceed. Ones which stand out include the apartment block on 20-36 High street near Debenhams, the proposed hotel next to the Waldorf pub on Piccadilly (plus the Ronaldo hotel), the apartment/ student developments on Whitworth Street West (ex Vision site and Glennrook), the old Renaissance hotel site residential component, the Albert Bridge House site, etc. I’m sure there are many more. Any updates on these/ others?
By Anonymous
Get real anon 3.36…….so a few very large complex schemes haven’t materialised……no shit sherlock not everyone can be a winner. Those schemes would be challenging when everything is in their favour let alone when they are sailing into a force 10. Look at what has been built and look at the completions forecast for this year. Its a seriously challenging world out there but with the money from the growth fund and forward thinking planners Manchester is in a good position to capture that elusive funding if/when normality returns. If it doesn’t Renekar Salboy and FEC will plough on and the institutions and energy of the corridor will keep the wheels turning and eventually the government will have to invest in rail. Stop be so negative and value what we have
By Evertheoptimist
From a Manchester perspective its good to see the city accounting for around 1/3 of the activity, but London needs to spread the wealth, investment and burden of national growth across the country. Let’s get those infrastructure and transport projects funded across our cities and the growth will follow.
By GShutty
S – 30 years of continuous growth in the Manchester market cannot be seen as a bubble. Fluctuations in the property sector is inevitable especially after decades of sustained growth. In my view the gateway process is a real burden on development with the Building Safety Regulator’s poor performance in turning around applications creating a real drag in the sector. The Government needs to sort out the inertia at the regulator.
By Anonymous
It’s all relative isn’t it? Take the Legacie cranes down from Liverpool’s skyline and nothing is happening.
By Anonymous