Rise of Construction Costs

Davis Langdon have recently published their findings on the current trend of tender returns.

'Building prices in Greater London rose by another 1.5% in the last quarter and have risen by almost 8% over the last year with a similar rate of inflation forecast to continue for the next two years.

In Greater London the volume of new-build output rose 18% in cash terms last year to a value exceeding £10bn for the first time. The north-east of England matched this rate of growth but with an industry 25% the size of that of the London region. '

In the current market the balance of power, when it comes to contract negotiation rests firmly with contractors. They seem to be able to pick and chose projects they wish to tender for, charging a premium for the more complicated projects.

With an increase in the cost of building materials, there seems to be no let up in the rise of prices.