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
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%)
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 |
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 |
Construction costs UK by region

- 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%