BCIS basics: using location factors in construction

A project’s location can have a big influence on the end cost.

For instance, it’s well known that building costs, like other costs, are often higher in London than in other areas of the UK.

Different topographies bring unique challenges too. Overcoming limited site access in city centres or sourcing and transporting labour to remote areas can both increase the final project cost.

Ensuring price variations between regions, counties or districts are understood and accounted for in forecasts and planning is therefore essential for limiting the risk of over- or underestimation.

Cue location factors – indices that measure price differences between different locations, independent of design considerations.

Whether you’ve got a BCIS subscription, or are simply curious, let’s take a closer look at location factors and how you can use them in the service.

What are location factors?

Location factors or location indices are effectively the cookie cutters of cost assessing.

Think of the cookie dough as the combined price of materials, labour, plant, M&E, market forces and other non-design components in your project.

In cost assessing, the location factor is the mould that changes the dough’s shape or, in real-world terms, adjusts the total project price to reflect the price of labour, materials and other project elements that are specific to a local area.

For instance, the location factor for a crowded, urban area such as London can include a measure of prices arising from the equipment or methods needed to access constrained sites.

Fundamentally, location factors are intended to give a closer, more realistic idea of how local prices could influence a project’s price before design.

Crucially, location factors do not reflect elements such as building size, design complexity and other design features.

How are BCIS location factors calculated?

BCIS location factors are calculated from rates from accepted tenders shared with us by construction businesses and professionals across the UK.

We base our location factors on the most recent regional differences between these prices and combine them with a long-term average of the price variation between counties and districts and their respective region. This is because regional price differences are known to vary over time.

All of our location factors are set in relation to a UK mean factor of 100. This can be used as a benchmark to assess whether location-specific project prices will be higher or lower than the national average.

Using location factors in the service

Location factors can be used in different ways within the BCIS service.

For instance, BCIS CapX and BCIS TotX subscribers can use and explore location factors across the analyses, average prices, duration calculator and tender price studies modules.

Within the first three modules specifically, subscribers can review and compare the cost of historic, real-world projects as well as the forecast price of custom or sample buildings in areas of their choice.

Under the tender price studies, BCIS CapX, BCIS OpX and BCIS TotX subscribers can also view a full list of all the BCIS location factors. Location factors in this list can be adjusted by date and users can search factors by postcode or local authority name too. Users with access to the BCIS Life Cycle Evaluator can also apply location factors to custom and sample projects.

Moreover, BCIS ProtX subscribers are able to use location factors within BCIS’s reinstatement calculator. This function valuably shows how location-specific prices influence rebuild prices. BCIS ProtX subscribers also have access to average price indices, and the ability to use location factors within this module.

Using BCIS location factors reduces guesswork. They empower you with greater price insight to make more informed decisions, whatever your need.

To keep up to date with the latest industry news and insights from BCIS, register for our newsletter here.