Rising renovation costs: The refurb projects that now cost 40% more than just two years ago

Rising renovation costs: The refurb projects that now cost 40% more than just two years ago, according to new research by Rated People.

Demand for home improvement has skyrocketed since the start of the pandemic, so experts at Rated People reveal how much prices will be going up this year, and which renovation jobs will see the biggest price rises.

Key points from research:

• Demand for home improvement is up by 50% in just two years as homeowners adapt their homes for new ways of living
• Materials shortages, Covid and increasing production costs have made renovations more expensive, and 82% of UK tradespeople will be increasing their prices in 2022
• Since the start of the pandemic, the price for a bathroom renovation has increased by 40%, and loft conversions and kitchen renovations have both gone up by 25% on average

New research from the find-a-tradesperson platform, Rated People has revealed our desire for home improvement went through the roof in 2021. Half (49%) of UK residents improved their homes in some way – with popular projects including home bars, home gyms, and building walls in between open-plan spaces to create better zones for flexible living.

Demand for tradespeople increased by a massive 32% last year, and when compared to the start of the pandemic in 2020, demand for home improvement has gone up by 50%. In 2022, this appetite for home improvement isn’t slowing down any time soon, with 86% of UK tradespeople saying they expect to be ‘very busy’ this year.

But, the surge in demand, coupled with Covid challenges, material supply issues, production cost increases and workforce shortages has meant homeowners have been hit with increasing prices for different home improvement jobs, and have struggled to find tradespeople with availability to do the work.

The rising cost of renovations

The findings are taken from the 2022 Rated People Home Improvement Trends Report, and it shows that 89% of tradespeople say their costs (for things like materials and workforce) increased in 2021. As a result, prices for home improvement work increased by 15% on average for homeowners last year. Nearly four out of five tradespeople (78%) put their prices up by 20% or less, and 3% pushed their prices up by 50% or more.

This year, labour and material costs for a bathroom renovation are expected to cost around £5,726 on average, which is 22% higher than 2021, and a huge 40% more than in 2020. For a loft conversion, homeowners will have to pay 25% more compared to 2020 – that’s an extra £7,000 that homeowners now need to pay for the same job.

A kitchen renovation (including a complete rip out, fitting the new kitchen, worktop, tiling and work such as electrics, gas work and plumbing, but not the cost of the new kitchen itself) now costs an extra £1,500 compared to just two years ago, with prices now 25% higher.

The average price for an extension has increased by 9% in 2022 compared to 2021, and by 23% when looking back to the start of the pandemic in 2020. Homeowners now need to fork out almost £7,000 more on average for an extension compared to prices from just two years ago.

Prepare for higher prices if you need these trades

In 2022, nine in 10 tradespeople expect their costs will increase, and 82% say they will need to put their prices up this year. Jobs that need builders, heating engineers, plasterers and carpenters are the most likely to be affected by rising prices. Almost all builders (97%) are planning to increase their prices – and 91% of heating engineers, and 89% of plasterers and carpenters will be upping their prices this year.

When looking at the top 10 trades most likely to charge higher prices this year, a minimum of 77% from each trade say they will need to up their prices in 2022.

The top 10 trades increasing their prices in 2022:

1. Builders – 97% (are upping their prices this year)
2. Gas/ heating engineers – 91%
3. Plasterers/ renderers – 89%
4. Carpenters/ joiners – 89%
5. Handypeople – 88%
6. Plumbers – 84%
7. Roofers – 82%
8. Gardeners – 81%
9. Painters/ decorators – 79%
10. Electricians – 77%

Where have all the good tradespeople gone?

Homeowners also found it hard to get hold of tradespeople that are available to do the work. Almost two thirds (62%) of tradespeople said 2021 was ‘the busiest year they’ve ever had’, so it’s not surprising that 45% of homeowners struggled to find an available tradesperson last year.

London was the worst affected, with 54% of homeowners encountering availability challenges. And Liverpool (53%), Edinburgh (49%) and Belfast (48%) weren’t far behind.

Across the UK, 45% of homeowners also experienced delays with work they were having done – with Covid, workforce shortages and material supply issues contributing to many of the delays. 43% of homeowners also had to change their original plans because materials or design elements were sold out.

How homeowners are spending their home improvement budget in 2022

Despite the challenges and price rises, demand for home improvement and renovations is staying strong this year. So, when it comes to the ways we’ll be adapting our homes, homeowners are investing most of their budget on maximising space and enhancing functionality. Extensions, annexes, new conservatories and building walls to create separate rooms are among the top five improvements that homeowners want to spend the most money on in 2022.

Creating a home bar is sixth in the priority list when it comes to the amount of budget they’re setting aside – ahead of home gyms in seventh place. Other ‘pandemic-inspired’ home improvements like adapting a room to make it multifunctional, and adding an outdoor entertaining area also make the priority list.

The top 15 home improvements that homeowners want to spend the most money on in 2022:

1. Building an extension – £18,580 (average homeowner budget for work)
2. Building an annex – £16,731
3. Adding an en-suite bathroom – £15,885
4. New conservatory/orangery – £15,564
5. Building wall to create separate rooms – £13,977
6. Creating a home bar – £13,939
7. Creating a home gym – £12,057
8. New kitchen – £12,057
9. New porch – £11,252
10. Making a room multifunctional – £10,772
11. Creating outdoor entertaining area – £10,483
12. New windows throughout – £9,547
13. Tiling – £7,728
14. Garden landscaping – £6,622
15. Painting – £4,743

Adrienne Minster, CEO of Rated People, commented: 

“It’s incredible to see how the last two years have influenced the ways we’re improving our homes, but unfortunately the combined effects of Covid and Brexit have meant the vast majority of tradespeople have experienced cost increases, which they now need to pass on to homeowners to remain profitable.

“So many aspects of our lives are now affected by rising prices, so if you’re doing work to your home this year – to ensure you get the best value, it’s now more important than ever to start planning and budgeting as early as possible so you can negotiate a good price and avoid tradespeople being booked up for months in advance.

“At Rated People, we make it easy for homeowners to find quality, local tradespeople, so however you’d like to improve your home this year, we’re a great place to start your search for a trusted tradesperson.”

To see the full research and the newest edition of the Rated People Home Improvement Trends Report, visit here.

Kindly shared by Rated People

Main photo courtesy of Pixabay