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Housebuilders costs grew by 4.3% in the first quarter of 2022, according to the BCIS Private Housing Construction Price Index (PHCPI). This is the highest increase observed since the initiation of series in 1988. The resultant 1Q2022 PHCPI figure shows an increase of 15% in the year from 1Q2021.
The private housing construction output increased by 5.2% in 1Q2022 and by 6.2% in the year from 1Q2021.
Respondents gave the following reasons for changes in costs:
All contributors to this quarter’s survey reported an increase in construction costs. Specifically noting plasterboard, insulation, bricks, steel, concrete and timber as key materials experiencing price rises.
The share of the housebuilders reporting increased cost from subcontractors has been steadily growing, from 33% in 2Q2021 to 43% in 1Q2022.
With the new Building Regulations coming into force in June, BCIS continues to monitor the readiness of the industry to meet the requirements. Expected average cost uplift for meeting the new regulations, according to the respondents of this quarter’s survey, is summarised below:
A more detailed analysis about housebuilder’s readiness to meet the new standards and their assessment of how much it would cost is available here.
Looking ahead, respondents expect their costs to continue growing, albeit at a slower pace, expecting the growth in the 2Q2022 to stand at 3.3%.
We would like to thank respondents to this survey for their contribution.
The PHCPI is based on housebuilders’ costs in constructing a standard house. This index is adjusted for changes in specification and reflects only the movement in the underlying direct costs to housebuilders.
The BCIS PHCPI is published on BCIS Online.