RICS and BCIS report blames shortage of skilled labour, high oil prices and demand for raw materials
The rising costs of transport and raw materials and a shortage of skilled labour are pushing up the costs of home improvements, according to the latest RICS’ Building Cost Information Service (BCIS) report.
The BCIS Property Makeover Price Guide for 2008, launched today, has found the average cost of improvement work has risen by 20% over the past two years.
There is competition for skilled labour as the number of central and eastern European nationals are returning to their native countries is on the rise.
The upward trend in oil prices is also continuing to fuel the rising cost of transport, with forecasters predicting oil to rise to £100 per barrel in the next few years, some experts are predicting this to have more impact on economies than the current credit crunch crisis.
Global demand for raw materials also remains at an all time high, with emerging giants such as China and India showing no signs of a slowdown, commodity prices will remain high for years to come.
This has had a direct impact on roofing where costs have risen by 26%, plumbing and electric work has jumped 22% and painting has risen by 17%, all outstripping inflation over the past two years.
Joe Martin, BCIS executive director, said: “The current downturn in the housing market is forcing some homeowners to become more creative in meeting their accommodation needs.
“Many are choosing to stay put and renovate or extend in order to upgrade their property rather than taking on more debt in a falling market. This can be a wise strategy as home improvements add value to a property, and people will be well placed to take advantage of this uplift in value when the market shrugs off the current slump.”
The guide also allows readers to adjust the figures for their particular location. For example, a 3x3 single storey extension will cost approximately £23,940 in Greater London; in comparison it would cost £19,320 in the North West.