Housebuilders’ costs respond to increased workload


Housebuilders’ costs rose 3.4% in the year to Q1 2018, according to the BCIS Private Housing Construction Price Index (PHCPI)

Housing starts began to rise in 2013 and continued to rise steadily until a fall in Q3 2017 (latest available figures), albeit they were still up 44% on the same quarter in 2012. Housebuilders’ costs started to pick up at around the same time and in Q1 2018 were 28% higher than in 2012.

In the latest quarter, 71% of contributors reported increases in costs. Of those that indicated a cause, 20% cited labour costs had risen, 30% reported materials cost increases and 50% cited increases in both labour and materials.

The responding contractors expect their costs to continue to rise in Q1 2018 by a further 1%.

Cost increases

Cost increases reported by individual housebuilders in Q4 2017 included:

  • bricklayers
  • timber, carpentry and joinery
  • groundworks
  • scaffolders
  • roof tilers
  • electricians.

Housebuilders’ costs

Sources: Ministry of Housing, Communities and Local Government (MHCLG), BCIS, Office for National Statistics (ONS).

The PHCPI is based on housebuilders’ 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 the housebuilders.

The BCIS PHCPI is published in the BCIS Online service.

If you are a housebuilder and would like to participate in the BCIS Private Housing Construction Price Index quarterly survey, contact the BCIS data team.


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