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Housebuilder costs continue to increase

Published: 14/09/2022

Housebuilder costs continue to grow with a 3.7% increase in the second quarter of 2022, with the BCIS Private Housing Construction Price Index showing an increase of 15.3% in the year from 2Q2021. This is the highest increase observed since the initiation of the series in 1988, a trend that has been continuing for the past four quarters.

Private housing construction output increased by 3.9% in 2Q2022 and by 8.8% in the year from 2Q2021.

All respondents cited increased costs, with nearly a half reporting an increase in subcontractor’s costs. One third reported increases in costs of both materials and labour, and the remainder cited increases in materials costs only.

The share of the housebuilders reporting increased cost from subcontractors continues to grow. The report shows an increase from 33% in 2Q2021 to nearly 50% in 2Q2022.

When asked about the expectations for the next quarter, respondents to this survey expect housebuilding costs to grow by 3.2% on average.

BCIS continues to monitor the readiness of the industry to meet the requirements of the new Building Regulations. More than a half of housebuilders completing the BCIS survey said that they are at a feasibility stage, focusing on researching and trialling different solutions for meeting Part L. Within this group 40% were trailing ASHPs, 40% Gas boilers and PV and 20% shared that they are implementing other solutions, for example, extra wall and floor insulation.


The stage of preparation to meet the requirements of the new Building Regulations, 2Q222

Source: BCIS

Housebuilders estimate a cost increase for meeting Part L of 4.3%, slightly down on 4.4% reported last quarter.


The expected cost increase of meeting new Building Regulations, 2Q22

Source: BCIS

BCIS would like to thank respondents to this survey for their contribution.

The PHCPI is based on housebuilder costs in constructing a standard house. The index is adjusted for changes in specification and reflects only the movement in the underlying direct costs to housebuilders.

If you are a housebuilder and would like to participate in the BCIS PHCPI quarterly survey, please contact contactbcis@bcis.co.uk

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