According to the BCIS (Building Cost Information Service), construction costs are expected to rise by 15% in the next five years. However, there’s still hope. And some areas of stabilisation are possible as market conditions change according to industry trends.
We know why you are concerned about this question:
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When is the right time to build, or should you wait for costs to go down?
That means for homeowners, if they begin construction or renovation projects sooner rather than later, they will save money in the long run. Paying more as material and labour costs continue to rise is a risk of delay.
In this blog, we’ll look at what’s behind construction costs, which prices are going up or down, and how these trends will affect homeowners and businesses. Stay till the end and you get your question answered.
Common Construction Materials and Prices:
The material cost estimates provided are based on typical industry pricing in the UK, but specific figures can vary depending on factors like location, suppliers, and market conditions. The prices mentioned are accordingly to the commonly accepted UK construction industry estimates and materials suppliers.
| Material Type | Details | Price Range |
| Concrete | – | Prices vary based on project requirements |
| Steel | Reinforcing steel bars | £650-£850 per tonne |
| Structural steel | Around £1,100 per tonne | |
| Bricks | Standard clay bricks | £0.50-£1 per brick |
| Facing bricks (higher quality) | £1.20-£1.80 per brick | |
| Timber | Softwood | £300-£400 per cubic metre |
| Hardwood | £500-£700 per cubic metre | |
| Insulation Materials | Mineral wool (100 mm thick) | £4-£6 per square metre |
| Hardwood | £500-£700 per cubic metre | |
| Roofing Materials | Concrete roof tiles | £0.70-£1.50 per tile |
| Slate roof tiles | £2-£3 per tile | |
| Cement | Bagged cement (25 kg) | £5-£7 per bag |
| Sand | Building sand | £30-£40 per tonne |
| Sharp sand | £35-£50 per tonne | |
| Aggregates | Gravel | £40-£60 per tonne |
| Crushed stone | £50-£70 per tonne | |
| Glass | Double-glazed window panes | £40-£60 per square metre |
UK Construction Industry: Trends, Challenges, and Economic Outlook for 2025
Check out how the construction industry, trends, challenges and economic outlook foresee for 2025 below.
Material Costs:
Construction material prices have stabilised and significantly increased during the pandemic, and even during a pandemic. The timber prices dropped 30% from their peak in 2022, while concrete and cement prices were still high, falling 4.2% on the year for production.
The Cost of Labour:
Wages in the construction sector continue to rise due to labour shortages. It was started after the EU workers started to move back from the UK after Brexit. And, despite the availability of skilled workers, the demand has not caught up with supply.
What is the Economic Outlook for 2025?
In 2024 and 2025 GDP growth in the UK is only 0.9% and 1.3% respectively, and has a limited effect on the potential for expansion in the construction sector. Construction output is forecast to decline by 1.2% in 2024 and recover at 2.7% in 2025. Still, this information is referenced by the (UK construction blog, gov.uk, construction index), but not the final words as the situation changes rapidly.
The Impact on Housing Market:
New housing starts will drop by 6% in 2024 and increase by 3.8% in 2025, according to forecasts. The same is true for private housing repair and improvement work, which is expected to fall by 4% in 2024 but to recover in the years to come.
The Impact of Inflation:
While inflation rates are easing, overall cost pressures on the sector may ease slightly, but this will vary by material and service.
The information referenced from (UK construction blog, gov.uk, construction index)
Are UK government policies likely to lower construction costs in 2025?
The UK government announced discounted subsidies or cost-effective policies for the construction industry, to promote affordable housing and sustainability projects. There are other factors like the labour shortage, and supply chain resilience are also being considered. However, new regulations can raise the cost of getting started.
How will the cost of energy impact UK building projects in 2025?
The higher energy costs can put a great strain on material production and on-site construction activities. Developers have the opportunity to overcome long-term energy-related costs by embracing sustainable construction.
What investments and allocations has the UK government announced for the construction industry?
Find out how the UK government has introduced economic packages for construction sectors across the UK.
| Focus Area | Details |
| Infrastructure Investment | £164 billion for 2023–2025; £700-775 billion in the next decade. The priorities are housing, transport and energy. |
| Housing Development | We want to build 1.5 million homes over 5 years, deal with the housing crisis and support communities. |
| Sustainability Goals | It aims to produce 10GW of low-carbon hydrogen by 2030, as well as eco-friendly infrastructure. |
| Workforce Development | By 2025, over 500,000 new workers will be needed. |
| Technology Integration | Prioritising digital tools and cybersecurity to manage projects efficiently and be resilient |
| Project Acceleration | The National Infrastructure and Service Transformation Authority (NISTA) is established to simplify approvals and reduce delays |
What sectors will get more affected if the construction materials cost go high?
The construction industry in the UK is currently facing significant challenges that could impact costs well into 2025. When the construction prices will soar these are the areas that will get affected.
1. Development of Residential Housing
New housing projects will take a direct hit from the cost of materials, particularly timber and steel, and ongoing labour shortages. This means fewer affordable homes could be built and new home prices could keep increasing, further straining the housing market.
2. Commercial Construction
Labour and material prices are going high, so we can see the possibility that these projects will come in at a higher overall cost. Small to medium enterprises will find it particularly difficult to begin new developments or expansion with increased upfront costs.
3. Public Sector Projects
The government-backed projects will also cause suffering for schools, hospitals and infrastructure improvements. However, the government is targeting its ambitious green building targets and there may be additional costs for meeting the further sustainability requirements.
4. Renovation and Refurbishment
In particular, older properties will need more work and, therefore, will be more expensive. In turn, homeowners may find themselves unable to delay or scale back their renovation plans.
5. Infrastructure Projects
Timelines and budgets will be affected by the prices of steel, cement and labour, especially in projects that are already operating under financial pressure or have tight deadlines.
Conclusion
Construction costs in the UK are projected to rise by up to 15% over the next five years, which means material prices, labour shortages, and economic factors. There’s no need to delay your construction projects to get better rates in future. Start now and save yourself time and money, as well as avoid the inevitable price hikes.
We at Buon Construction are a trusted name in the construction industry. We are experts in home renovations, kitchen remodelling, exterior design, and fencing, and offer high-quality services for your needs and budget. Our satisfied customers speak for our commitment to providing cost-effective and reliable construction solutions.
Contact Buon Construction today for your dream project at rates you won’t believe! It’s time to let’s build your future.
FAQs
1. Why are UK construction costs so high in 2024?
Construction costs in 2024 remain elevated due to a combination of factors including rising material costs, labour shortages, inflationary pressures, and increased demand for infrastructure projects. Supply chain disruptions and fluctuating energy prices also contribute to higher expenses in the construction industry.
2. What factors could influence a drop in UK construction costs in 2025?
Key factors that could drive a decline in construction costs include improved supply chain efficiency, stabilisation or reduction in material costs, increased availability of skilled labour, and potential economic cooling that decreases overall demand. Additionally, advancements in construction technology and sustainable building practices may contribute to cost savings.
3. Will government policies affect construction costs in 2025?
Yes, government policies can significantly impact construction costs. Policies aimed at boosting housing supply, reducing red tape, or investing in sustainable construction could lower costs. Conversely, stricter regulations or additional taxes may increase expenses. Watching for policy changes related to housing, infrastructure, and inflation management is crucial.
4. What should property developers consider when planning for 2025 construction projects?
Property developers should closely monitor market trends, economic forecasts, and material price movements. Implementing risk management strategies such as locking in prices with suppliers, adopting cost-effective technologies, and remaining flexible in project timelines can help mitigate potential cost fluctuations in 2025.