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News & opinion

3 JAN 2019

Housebuilders’ costs rising steadily

Housebuilders' costs rose 3.9% in the year to 3Q 2018, according to the BCIS Private Housing Construction Price Index (PHCPI).

Construction output from the housing sector has been rising steadily since 2013 and at constant prices is up 8.6% in the year to 3Q 2018.

In the latest quarter, 62% of contributors reported increases in costs. Of those that indicated a cause, 20% cited labour costs had risen, 50% reported materials cost increases and 30% reported increases in both labour and materials.

The responding contractors expect their costs to continue to rise in 4Q 2018 by a further 1%.

Cost increases reported by individual housebuilders in 3Q 2018 included:

  • bricklayers
  • blocks
  • timber and
  • electrical works.

One contractor commented that 'skills shortages in construction and weak sterling are driving up prices and offsetting the ongoing uncertainty caused by Brexit and the recent falls in construction output generally'.

Sources: Office for National Statistics (ONS), BCIS

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 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, please contact