Cost of meeting new Building Regulations applied to ABI/BCIS House Rebuilding Cost index

The cost of meeting new Building Regulations has been applied to the ABI/BCIS House Rebuilding Cost index (HRCI). The HRCI continues to grow at an unprecedented rate, reaching 17.3% annual growth (or 5.7% monthly growth). This is the highest growth rate since the initiation of the series.

The high growth in June 2022 was driven by two main factors: continuous rise in the cost of materials as well as additional costs required to meet the new Building Regulations that came into effect on the 15^th of June 2022.

The highest increases in the cost of materials in June were registered for aerated blocks (14.2%), insulation (12.3%) and roof tiles (9.2%). Other materials recording high monthly cost rises (above 5%) were stainless steel sinks, quarry tiles, kitchen units, cement, and radiators.

The UK government recently announced a number of changes in order to deliver net zero CO2 emissions by 2050. The HRCI has been adjusted to ensure the models comply with the newly announced Building Regulations.

There are several ways to comply with the improved energy efficiency requirements for new homes. For example, improved specification of the walls, floor, roof, windows, and doors. The two main options for building services are:

• Photovoltaic Panels (PV) with a gas boiler, and wastewater heat recovery (WWHR)
• Air Source Heat Pump (ASHP).

The PV route requires the least change from current building practices. For many housebuilders it is the lowest cost solution in the short term; however, it may be a temporary solution as gas is likely to be phased out in the short to medium term.

The ASHP route supports the progress towards the 2025 Future Homes Standard and has been adopted as a solution in the HRCI model.

The Scottish rebuild costs already include for PV, WWHR and enhanced insulation. The Welsh rebuild costs already include for PV. Therefore the additional cost of complying with either the PV or ASHP route will be less in these areas and this has been factored in the overall weightings of the model.

What’s new in the HRCI?

In response to the new Building Regulations, from June 2022, the HRCI model includes the adjustment to reflect the following costs:

• Enhanced roof insulation specification
• additional cost for trickle ventilation and improved U-values for external windows and doors
• additional cost for air source heat pump where appropriate
• additional cost for photovoltaic panels and improved boiler where appropriate
• additional cost for wastewater heat recovery system where appropriate
• additional cost for electrical vehicle charging point
• an allowance was added to both commissioning and testing of the installations as required by the approved documents.

Need more information?

More information on this topic is available in the articles Housebuilders estimate cost uplift for meeting Part L between 1.8% and 7% and Housebuilders cost up 15% in the past year.

A detailed analysis of the material cost increases is available in the article BCIS Materials Cost Index: Materials costs continue to grow at an unprecedented rate.