Database update shows rise in dilapidations work prices

The cost of building activities associated with schedules of dilapidations increased by an average of 17.7% in 2Q2023, compared to 2Q2021, according to new rates published by BCIS.  

The dataset, published in online in the BCIS OpX updates the previous 2022 edition.  

Rate increases were not uniform across the trades, with some more affected than others. While there was an average 9.6% increase in fire and lightning protection rates, the average uplift in costs associated with lift and conveyor installations was 23.0%. 

The rates reflect wider movement in costs over the last two years. Although materials cost inflation, which peaked at 25.2% annual growth in the BCIS Materials Cost Index in June 2022, has cooled, prices generally remain high.

The below chart shows growth, on an annual basis, of three of the BCIS Price Adjustment Formulae Indices (PAFI) covering labour and material costs for working with plaster, painting and decorating, and carpet finishes – activities which would typically be included in schedules of dilapidations.

Karl Horton, BCIS Chief Data Officer, said: ‘The increase in costs associated with preparing, adhering to, or challenging schedules of dilapidations shows how important it is to work with reliable data, and how beneficial it is for more accurate budgeting and cash flow management.

‘Depending on the setting for which the schedule is being prepared, or for which early cost advice is being given, there could be considerable differences in the cost to a tenant at the end of their lease.

‘It is also encouraging to see more conversations taking place around so-called green or sustainable dilapidations.

‘The typical cycle of dilapidations has traditionally generated a significant amount of waste. Take, for example, an office which has a range of fixtures and fittings appropriate to the space installed, which are then stripped out at the end of the tenancy.

‘As per the lease agreement, the tenant is paying for the space to be returned to the state it was in at the point of occupancy, along with any remedial work, only – as can often be the case – for a new tenant to move in and put in the same or very similar fixtures and fittings that have just been removed.

‘The life span of these fittings, if they are still in good condition, shouldn’t merely be assumed to mirror the length of the tenancy, particularly when we consider the additional associated embodied carbon.

‘Thankfully, it appears to be increasingly common that landlords and tenants are agreeing on what work can be left in place, reducing the costs involved at the end of the tenancy.

‘As well as removal, replacement, reinstatement and new work, our dataset includes items covering repairs and cleaning in residential, commercial and industrial settings.’

Although there are important differences between dilapidations claims in different countries, the price information presented in the dataset applies across the UK, subject to appropriate location adjustments being made. Location factors are included in both the printed price book and online dataset to guide adjustments.

The total number of rates in the Dilapidations Estimating Price Dataset, which is structured in accordance with the RICS New Rules of Measurement (NRM), is now 3,644, including 66 new rates for the 2024 edition.

With an additional 87 new resources, the 2024 edition now incorporates 1,183 resources.

New items for 2024 edition:

• In Upper Floor timber repairs, build-ups for I joists and Posi or standard open metal web joists, and, in New Work, supplying and fitting I joists and Posi or standard open metal web joists in domestic, commercial and flat roof settings.
• In Wall finishes, decorations, build-ups for organic emulsion paints to new plastered walls and to unpainted brick or block walls.
• Supply and fit sanitary fittings, build-ups for urinal range, white bowl, cistern, sparge pipe, trap in New Work.
• Supply and fit sanitary fittings, build-ups for single urinal bowl, pipe and fittings in Replacement Work.