Building costs to rise above inflation, warns RICS

The cost of building is expected to rise well ahead of inflation over the next five years, Royal Institution of Chartered Surveyors (RICS) research published today (Thursday) has warned.

Public infrastructure projects, excluding social housing which is at an all time low, are expected to provide the main stimulus for growth.

The forecast is based on the prompt release of public funds and the assumption that the Chancellor will stand by his commitment to expenditure on construction.

Peter Rumble, of RICS Building Cost Information Service, said: "Tender prices are expected to rise at around double the rate of inflation over the next five years, by 27% against a background of 13% general inflation.

"The increase in the availability of work means less competition which translates into price rises.

"Taken as a whole this is good news for UK contractors, but less so for clients who will face steeper bills," he said.