News by Checkatrade that renovation costs have dropped by 25% since 2023 might be welcomed by many homeowners who have delayed projects amid rising inflation and economic uncertainty.
But industry experts caution that the headline figure doesn’t necessarily mean building work is suddenly “cheap” again, or that budgets can be relaxed.
A slowdown in growth, not a dramatic drop
Michael Holmes, property expert for the Homebuilding & Renovating Show, believes the reported drop may reflect changing behaviour rather than a wholesale reduction in construction costs.
“I expect this reflects the reduced scale and scope of the average home improvement project – and the correspondingly reduced budget – rather than a reduction in costs,” he explains.
While price rises have cooled compared to the post-pandemic spike, Holmes points out that this does not mean materials and labour are falling in price.
“The RICS Build Cost Index shows the rate of increase in costs has slowed, but is still increasing rather than showing a fall,” he says. “It is true that builders are squeezing margins to get work in a more competitive climate, but they are still having to contend with inflation on material and labour costs of around 4%.”
In other words, projects may feel more manageable, but that doesn’t mean underlying pressures have disappeared.
Greater stability brings better budgeting
Tim Phillips, quantity surveyor for the Homebuilding & Renovating Show, agrees that the situation is more nuanced than a simple 25% saving. “The Checkatrade index headline of a 25% fall reflects a return towards more normalised pricing and less volatility in material and labour costs, rather than a uniform across-the-board reduction,” he explains.
From a cost planning perspective, however, this is still positive news.
“As a quantity surveyor I see this as a positive for homeowners planning renovation budgets – more predictable quotes and reduced risk premiums help with planning,” says Phillips.
In recent years, contractors often added higher contingencies to account for rapidly fluctuating material prices. With volatility easing, those premiums are beginning to soften, making quotes more transparent and reliable.
Caution still required for larger projects
With greater stability returning to the market, Phillips advises homeowners planning major extensions or structural renovations to use this period to their advantage through thorough early planning.
“Larger projects benefit from rigorous early cost planning and an appropriate contingency for scope changes, as material prices remain varied depending on the type of project,” he explains.
Holmes agrees, encouraging homeowners to look beyond the headlines and focus on clear specifications and well-structured budgets. In a more competitive climate, there are opportunities to secure good value, particularly for those who approach projects with careful preparation and professional guidance.
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