Planning a new building is always very exciting – whether it’s your own home or a big commercial project. However, it is vital to figure out your expected costs so you can budget effectively. Construction costs in the UK are among the highest in the world (and London is the most expensive city to build in). So, make sure you set aside enough time to work out those estimates to avoid nasty surprises.

In this blog, you will learn about building costs per square metre in the UK. Please note that prices can vary dramatically depending on materials used, location and complexity of the project. Given today’s high rate of inflation, these estimates may quickly go out of date (we are writing in October 2022). You should always speak with a licensed quantity surveyor to get the most accurate estimate for your specific project.

Ever-increasing construction costs in the UK

Practically all factors that affect UK construction costs are currently on the rise – from materials to land to labour. Recent data from RICS shows that material prices have reached a 40-year high, with timber and steel being particularly expensive this year. Meanwhile fees for construction workers are climbing too. A Checkatrade survey recently found that some building professionals are charging almost 90% more in 2022 than they were in 2021.

Why are construction costs in the UK rising so fast?

  • The war in Ukraine has led to severe shortages of key materials
  • General inflation triggered by the pandemic, the Ukraine conflict, and other economic issues
  • Brexit has impacted UK construction, with shipping delays and a reduction in foreign workers
  • High demand means builders can charge more

Learn more: What’s behind UK construction material shortages and cost rises?

Average building costs in the UK – residential and commercial

To estimate building costs in the UK, we’ve used data from CostModelling.com, a cost estimating software company who provide extensive data of prices across the country.

The standard way of measuring building costs in the UK is now mainly based on building costs per m2 (although some contractors still calculate the cost of building per square foot). So, if you want to calculate construction costs in the UK, you first need to know the size of the building you wish to put up.

It’s also important to consider the scale of a project. A one-off project will tend to cost more, while a large housing estate or office park will cost less per square metre. This is thanks to economies of scale.

CostModelling.com’s data summarises the core costs (materials, labour, building type and region). That said, there are several other costs that aren’t included, such as:

  • VAT (20% for most things, but 5% for builders’ services)
  • Planning permission (for residential properties, this is between £206 and £462, depending on dwelling type, while residential planning permission is based on gross floor area)
  • Parking, new roads, new streetlighting etc. (add up to 15%)
  • Landscaping (add 5%)
  • Risk (add up to 10%)
  • Architect’s fees (5% – 15%
  • Insurance (1%)

Let’s first look at average house build cost in the UK, before looking at commercial property costs.

 

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Average house build cost UK

The most common type of house in the UK is a semi-detached. According to CostModelling.com’s data, the current price per square metre for a semi-detached is between £1,990/ m2 and £2,210/ m2, making the average price £2,100/ m2.

The following table shows average house build costs for different kinds of home:

Type of housing Lower average cost Average cost Upper average cost
Flat £1,700/ m2 £1,790/ m2 £1,880/ m2
Terrace £1,400/ m2 £1,480/ m2 £1,560/ m2
Semi-detached £1,990/ m2 £2,100/ m2 £2,210/ m2
Detached £2,260/ m2 £2,380/ m2 £2,500/ m2

So, for example, if you wanted to build a new semi-detached home that was 100 m2, you would multiply this figure by the average cost for that kind of building = £210,000.  

Of course, you also need to bear in mind all the other factors listed above which will add to the cost.

Housebuilding: Key challenges and opportunities for the industry

Commercial property cost UK

There are of course many, many different kinds of commercial property, but the following table will give you a flavour of costs for some common types.

Type of commercial property Average cost per square metre
Regular offices £2,050/ m2
Retail units (shell only) £2,050/ m2
£1,10/ m2 £2,050/ m2
Shopping centre £6,150/ m2
Schools £2,050/ m2
Factories £1,070/ m2
Warehouse £1,090/ m2

If, for instance, you wanted to build a big new warehouse for an eCommerce company at 18,000 square meters, you would multiple by 18,000 by £1090 = £1,962,000.

Construction costs UK by region

As you might expect, the costs of building a house or commercial property in the UK vary significantly depending on the region. CostModelling.com has provided a handy regional variations weighting, that helps you estimate up or down in relation to the average cost across the country.

If the UK average is 100, you then multiply this by CostModelling.com’s percentages to find a local estimate:

  • North East: 94%
  • North West: 98%
  • Yorkshire and Humberside: 97%
  • West Midlands: 96%
  • East Midlands: 98%
  • East Anglia: 103%
  • South West: 101%
  • South East: 106%
  • Outer London: 113%
  • Inner London: 118%
  • Wales: 97%
  • Scotland: 98%
  • Northern Ireland: 82%
  • UK National Average: 100%

Let’s look at some examples to figure out the average cost of building a house in UK regions.

How much does it cost to build a house in London?

Let’s assume you are planning to build a terraced house in the inner London region. According to the ONS, the median size of a UK house is 99 m2. CostModelling.com’s data shows the average cost to build a terraced house is £1,480/ m2. So, if we multiply this by 99, we get a total of £146,250.

Then, we must multiple this total by the inner London regional weighting. So, £146,250 X 118% = £172,575.  

How much to build a house in Scotland?

Imagine you want to build a detached house in Scotland. According to Savills, the median floor space of a UK detached home is 152 m2. The average cost of building a detached house is £2,380/ m2. So, if we multiply this by 152, we get a total of £361,760.

Then, we multiply this by the Scotland regional weighting. So, £361,760 X 98% = £354,524.

How much does it cost to build a house in the West Midlands?

Say you wanted to build a semi-detached home in the West Midlands. We know the average price of a semi-detached home works out as £2,100/ m2, and Savills’ data shows the average semi-detached is 93 m2. So, this means the average cost of your semi-detached would be £195,300.   

Then we apply the regional weighting: £195,300 X 96% = £187,488.

How much does it cost to build an office in Wales?

Say you wanted to build an office in Wales with a total floor space of 1000 square metres. If the average cost of an office is £2,050 m2, then we multiply this by 1000 to get a total of £2,050,000.

We then apply the regional weighting: £2,050,00 X 97% = £1,988,500.

How much does it cost to build a school in Northern Ireland?

Perhaps you have been commissioned to build a school on a 3,000 square metre plot. We know the average cost per square metre is £2,350, so we multiple this by 3000 = £7,050,000.

With Northern Ireland’s local weighting: £7,050,000 X 82% = £5,781,000.

You can use these calculations to figure out a rough estimate of the cost of your next build.

Stay on top of construction costs in the UK with PlanRadar

PlanRadar is the leading construction project management platform, and it provides you with multiple features to manage expenses and stay within your budget. The tool lets you track what has been completed, by whom, and how much it should have cost. You can monitor site data in real time, create reports, sign off on project stages, and know exactly what’s happening on your site. That helps you stay on top of invoicing, materials, labour, and avoid the risk of cost overruns.

Related: How construction contractor software protects you profits

Find out more about PlanRadar and how it can help you manage your next building project’s costs.