Are building costs still going up or finally coming down?

[Starryeyes1984]

We have just sold our house (in Warwickshire) with the hope of finding our forever home. Given our budget we're likely going to buy something that needs extending/renovating to create the space we're after. I know that building costs went up massively during covid but are the costs of materials and/or labour still going up? For example extending over a garage to create a bedroom and an en suite I would have thought would be £50-60k plus VAT but is this remotely realistic! I don't want to buy a house and then realise we'll never be able to afford to do it.

Core inflation, which accounts for the majority of costs you are talking about, continued to increase in last months figures. It's still getting more expensive not less (in nominal terms). Hence the renewed effort by the BOE to further increase rates. However its not quite that straightforward - if you are fortunate enough to be increasing your earnings more than core inflation - then the cost to you, personally, is decreasing. If that makes sense.

Building costs are steady at the moment. Not going down though, so still 20% up from 2020. I don't think your budget is realistic for a double extension especially if the garage has to be knocked down. We live in the SE.

Probably too soon for there to be much impact on building costs. I do wonder if they might go down a bit once demand decreases due to mortgages, cost of living etc.

The cost of materials still seems to be increasing although not at the rate they were. Labour is definitely increasing as they are as affected by the COL crisis as everyone else but more able to respond to pricing pressures.

Interestingly I’m seeing local, well regarded builders advertising again which I haven’t for a good few years when they had more than enough work.

I asked my plumber a couple of weeks if demand was beginning to slow. He said yes - demand had slowed for new bathrooms and the like, but holding steady for maintenance jobs.
He did manage to fit me in pretty quickly this time versus a few months ago

That will be because a lot of potential customers are priced out, and the builders can't afford to reduce prices due to their own costs.

I asked my ex husband this same question last week as he's in trades and his answer was that in Yorkshire, work is slowing down but material and labour costs are still rising. I guess that means costs will come down but for him he's still quoting high. I asked because I need some work doing myself but I'm gonna leave it for the minute

We are currently extending and renovating (West Midlands) some ball park figures we had: single story ground floor extension £40k, double storey side extension £100k, loft conversion £40k. Needless to say we aren't doing all three! We've also just had quote from same builder already doing the extension for outdoor work including paving, fencing, sone steps, and small wall - £26k! Now that one did shock me! He said there had been a big increase recently in the raw material costs for that, but as far as I can tell on the house extension the material costs have not risen significantly in the 6 months or so we have been planning it with him, or at least our bill has only grown because of adding things!

Prices are definitely up, but I can't comment on how they're moving.

We're waiting for more quotes through, but we've just had one back for extension above the garage (garage doesn't need new foundations or rebuilding) and it came back at £125k in the West Midlands. I cried - like you, we expected £50-60k. Hoping that he just didn't want to do it!

I know my neighbours were quoted 40k for single story extension that went up to £100k and they’re now doing it themselves.it’s not come down yet.

@Stephisaur that's huge!

Friends bought a house a year ago also in Warwickshire and recently got their long awaited quote for a small single story extension

They were hoping it would be £25k max. It was £50k

We have just had our garage converted into a music room and it has cost around double the amount that was originally estimated.

@Starryeyes1984 I knew it would probably be above £50k but it just seemed insane!

BBC News - Visa rules eased for building and fishing industry
www.bbc.co.uk/news/uk-politics-66224588

Very depressing.
Just when builders were earning a reasonable wage, the govt do this, rather than incentivizing apprenticeships or traineeships.
The govt. should open skill centers, hire tradesmen as teachers, and give them a year’s training in bricklaying, carpentry, roofing etc.

@C4tastrophe you'd hope it was a temporary rule to ease the pressure while we upskilled in this area as a nation but that won't happen overnight and we clearly need more tradespeople immediately. The worry is there's no planning for dealing with these skills gaps and it's easier to just keep importing labour indefinitely.

The labour shortage for building has been going on since brexit started looming, and if we were going to see a surge on uk folks wanting to train in these trades to step into gaps, we’d have seen it.
whilst government support for ALL apprenticeships is needed, the shortage of labour in building trade and associated trades isn’t going to be fixed by this, even if money was thrown at it, for decades.

Right now the economy is stagnating by the stranglehold of labour for basic, low wage but higher skill jobs. This is because the idea of a “trickle down” economy is a scam , and we have a cost of greed crisis not a cost of living crisis. No one in this country can afford to do these jobs, unless they’re able to progress to skilled level where they earn a lot of money. Even with apprenticeship support, young people will not be able to love on their own while they train for years, and some families simply can’t afford to support them.

The argument about giving “British jobs to British people” is a fallacy. It results in stagnation of economies and recessions. It results in the cost of living rising as demand outstrips supply and suppliers can increase costs so that less well off can’t afford them. It is the talk of the Brexit campaign and now “stop the boat” fetish. And deeply worrying

our economy has ALWAYS flourished when we’ve had a healthy intake of “migrants” coming in to do low wage but skilled work . Our services have always flourished in these circumstances

when you’re willing to step up to do menial, hard physical labour at low wage in building sites, nursing homes , rock on and lecture everyone else about British jobs for British people, but until then don’t hold out expecting others to magically want to do this.

@Appleofmyeye2023 I used to be a bricklayer, hence my comments on the Skillcenter, where I trained.
I was a bricklayer in the 80s/90s, pre FOM, and there were no shortages then that required the import (exploitation) of cheap immigrants, despite a massive boom in building.
Importing cheap labour is fantastic for company profits, less so for the tax payers and low paid workers who find they can’t get a pay rise as there is a stream of cheap immigrants.

But, do lecture us on keeping wages rock bottom for skilled tradesmen.

My husband owns his construction business, and hate to say, but all his workers not turning up are are british and they call sick at least once a week.The only ones consistently coming to work are the Albanians guys working for him.
So you could say why doesn't he fire the ones not showing up, the answer being he is desperate for workers at the moment. So I think increasing the visa will benefit this industry.

My cousin has the same. He often gets brickies not turn up on a Saturday because they've been out on the lash.

Until we start treating these trades as precious as we used to folks graduate with degrees, we're never going to see young people commit to the industry. There's just not enough in it for them.

How small is small ?

Although in an economically volatile sector where even small economic trends tend to play out disproportionately on construction sector activity, doesn't it need to be a mix?

I don't disagree that we need to train more people in construction industry skills but I do think it would be a mistake to train up beyond the mean between the boom and slump cycles - otherwise you're investing in training large numbers of people who would either be economically inactive, retraining elsewhere or seeking opportunities abroad (though fewer of these than in the slumps of the 80s or 90s, for example).