How to pay a fair price for home improvements in a rising costs market

The cost of home improvements rose by 17% in January, compared to the average prices paid in 2021, according to the latest data from Checkatrade.

That means the average homeowner paid an extra £379 for any works carried out last month than they would have paid last year.

Categories which saw the biggest increases included building (+39%), tiling (+30%) and bricklaying (+22%).

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Inflation, material price hikes and intense homeowner demand are all driving forces behind the rising costs.

Mike Fairman, CEO at Checkatrade, says: "Inflation is really biting the price of home improvement and is big a contributing factor to the price increases we’re seeing, as the cost of raw materials continues to soar."

How the cost of home improvements has risen in the last 12 months

In fact that high demand, coupled with reduced supply, means that material prices are now at rates not previously seen across Europe and globally.

The rise in energy prices continues to affect the cost of production, while suppliers are still feeling the effects of the global shipping crisis that arose during the pandemic.

According to Composites UK, the trade body for the UK composites industry, the price of timber rose by 48% in 2021, plastics went up 78% and concrete prices increased by 43%, while the cost of steel has now hit a record high.

In February this year alone, the price of cement went up 1%, water based paint went up by 2.3% and non water based paint rose by 3.1%.

Overall, looking at a rolling 12 month snapshot, prices for home improvements have risen by 23.5% year-on-year.

Rising costs aren't stopping homeowners from renovating

Yet despite all of this, many of us are still wanting to upgrade our homes, especially after spending so much time in them over the last two years - and aren't being put off.

In fact, consumer appetite for renovations remains buoyant, with searches for tradespeople up 23.3% year on year.

"Some price increases we’ve seen could be further exacerbated by homeowners tackling larger projects around their homes," says Fairman.

But the situation is starting to have a knock-on effect on how tradespeople are pricing their jobs.

Most companies are now giving quotes with warnings that prices may change, as the market shifts on an almost daily basis, while quotes that last for two-to-three months have become a thing of the past.

“Prices are so volatile that many of our tradespeople are currently only keeping quotes valid for a few weeks at a time," says Fairman.

"Or even only quoting for labour with costs - plus materials on top."

So if you're planning to carry out home renovations in a rising prices market, how can you make sure you're getting the best value for the works you're having done?

Paying a fair price for home improvements

1. Get at least three quotes. This will give you a good idea of a reasonable price for the job. But be wary of any costs which seem particularly low.

2. Always ask for a supplier's 'best price' when you're shopping for new materials.

Whether it's carpets, bathroom suites or kitchen units, there can often be a bit of wriggle room in the negotiations - and you could end up saving hundreds of pounds.

3. Have a good contingency fund in place for any works you're doing.

Traditionally, 10% has been the norm. Right now, it's a good idea to add in a bit of extra slack to that: 15% might be more sensible to ensure you can get the job completed.

“We always recommend that homeowners who are planning improvements make a contingency budget in case of unexpected costs," says Fairman.

"And this has become particularly important while we continue to see such uncertainty in the market."

4. Make sure you get a quote for the works in writing. The quote will state all the work that's involved and what you will be charged for it.

With a written quote, the price should not increase without your approval.

If you decide to add in more jobs for the builder or want to change the materials being used, ask what the additional costs will be in advance.

Bear in mind that builders may be reluctant to quote for jobs being scheduled months in advance as prices are likely to change.

5. See if you can order materials now and get them delivered later.

Negotiating with delivery companies may help you to secure today's prices for works intended in a couple of months' time.

Getting in early is likely to work in your favour. The price of copper, for instance, is increasing on a near-weekly basis.

6. Manage resource and time. If you’re planning a big project, pay careful attention to how trades are phased throughout the works to avoid multiple call out charges.

7. Reuse materials. Consider whether you could salvage timber, pipes or other materials which may otherwise have gone into a skip.

Which trades are in hot demand right now?

‘Green trades’ were in particularly high demand in the last year, with searches for renewable energy up 189%, heat pumps up 22.8% and insulation up 11.6%.

However, there are early signs that homeowners may be starting to deprioritise non-essential improvements, with demand for kitchen fitters and bathroom fitters dropping by 8% and 9% respectively during March.

“It’s been an extraordinarily turbulent few years for homeowners and trades alike," says Fairman.

"From what we’re seeing across the industry, overall demand for work remains strong.

"However, we are starting to see signs that homeowners may be pressing pause on some key cosmetic home changes – for instance, kitchen and bathroom makeovers, suggesting a change in priorities as inflation and the cost of living starts to bite.

"There’s no sign of the current price hikes abating anytime soon, suggesting challenging times ahead.

"However, after the last year it’s anyone’s guess as to exactly what the next few months might hold.”