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Growth in housebuilding cost inflation slows further reports BCIS

Annual housebuilding cost inflation, as measured by the BCIS Private Housing Construction Price Index (PHCPI), continued to cool in Q1 2024, standing at 0.7%, down from a peak of 15.3% in Q2 2022. 

On a quarterly basis, this represented a 0.3% increase compared with Q4 2023, according to the latest data from the Building Cost Information Service (BCIS).

The BCIS Private Housing Construction Price Index is a measure of the prices paid by housebuilders for constructing houses and flats, including the changes in the costs of direct and subcontracted labour, plant and materials, overheads and profit attributed to the construction, but excluding the cost of land and other development costs and any development profit.

A range of small, medium and national housebuilders are surveyed each quarter to identify the change in prices paid for constructing a standard house type. Contributors are also asked to provide their expectations for price changes in the following quarter and the mean of these projections is published as a forecast for the current period.

BCIS chief data officer Karl Horton said: “Among the comments from respondents was the suggestion that while the costs and supply of materials are relatively stable, the planning process and getting approvals remains one of the largest obstacles.”

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