London construction costs in 2026: the Costed benchmark
What it actually costs to build in Greater London right now, by sector and project type, with the labour and material drivers behind the numbers.
Key facts
- Residential refurbishment, Greater London: £2,800–£3,800/m² (prime central: £4,000–£5,500/m²).
- New-build family housing: £3,200–£4,400/m² (build cost only, excluding land and fees).
- Loft conversion (mansard): £2,400–£3,200/m² including structural works.
- Two-storey rear extension: £3,000–£4,200/m² depending on glazing and finish spec.
- Cat A office fit-out: £900–£1,400/m². Cat B: £1,800–£3,500/m².
- 2025 quote price inflation in London: 3.5–4.5% (BCIS, Costed observed).
Costs across Greater London continued their slow climb in 2025, but the headline figure hides considerable variation by sector, borough and specification.
Materials have stabilised. Labour has not. Skilled trades, plasterers, joiners, lead workers, M&E, continue to set the pace.
Residential refurbishment, the working numbers
| Project type | Greater London | Prime central | |---|---|---| | Light refurb (decoration, kitchens, bathrooms) | £1,800–£2,400/m² | £2,400–£3,000/m² | | Mid refurb (replan, services renewed) | £2,800–£3,400/m² | £3,500–£4,200/m² | | Full refurb (strip-back, all new services) | £3,400–£4,200/m² | £4,200–£5,500/m² | | Heritage refurb (Listed, conservation) | £4,500–£6,500/m² | £5,500–£7,500/m² |
These ranges include preliminaries, contractor overheads and profit. They exclude VAT, professional fees, planning, and finishes provided by the homeowner.
New build and extensions
- New-build family house: £3,200–£4,400/m² for mid-to-good spec; £4,500–£6,000/m² for architect-led contemporary.
- Two-storey rear extension: £3,000–£4,200/m², glazing spec is the single largest variable.
- Single-storey side return: £3,200–£4,000/m².
- Mansard loft conversion: £2,400–£3,200/m², plus structural strengthening to the existing roof and floors.
Commercial fit-out
- Cat A (developer base build): £900–£1,400/m².
- Cat B (tenant fit-out): £1,800–£3,500/m² depending on FF&E and AV spec.
- Hospitality fit-out: £2,500–£4,500/m², wide range driven by kitchen extract and licensing works.
What is behind the 2025–2026 numbers
Three forces have shaped current London pricing:
- Skilled labour scarcity. The post-Brexit and post-pandemic exit of EU tradespeople has not reversed. Plasterers, qualified lead workers and heritage joiners are the tightest categories, adding 8–15% to relevant trades versus 2023.
- Material stabilisation. Steel, timber, plasterboard and copper are all within 3% of their 2023 levels after the 2022–2023 volatility. Concrete and insulation remain marginally elevated.
- Logistics and compliance. Tip fees, CDM compliance, low-emission zone (ULEZ-related) plant requirements and increased fire-safety scrutiny post-Building Safety Act add 2–5% to most central London projects.
How to use these numbers
These are benchmarks, not quotes. The right cost for your project depends on the design, the specification, the site constraints, and the procurement route. The fastest way to test a real project against these benchmarks is a one-page cost plan from an independent cost expert, typically a one-week turnaround on receipt of drawings and outline spec.
Frequently asked
- Why are London build costs higher than the rest of the UK?
- Three reasons: labour rates (London tradespeople command a 25–40% premium over regional averages), logistics (restricted site access, parking suspensions, deliveries by appointment), and waste disposal (London tip fees and skip permits add 2–4% to most refurbs).
- Have construction costs in London come down in 2026?
- No, but the rate of increase has cooled. Material prices have largely stabilised since late 2024. Labour costs continue to rise at 4–6% annually due to a structural shortage of skilled trades, particularly plasterers, lead workers, heritage joiners and qualified M&E engineers.
- What is a realistic per-square-metre cost for a London extension?
- For a two-storey rear extension at mid-range spec (good kitchen, decent glazing, underfloor heating ground floor), budget £3,400–£3,900/m² in 2026. For prime spec (Crittall, bespoke joinery, designer kitchen), £4,200–£5,500/m² is realistic. Add 15–20% for prime central postcodes.
- How much should I hold for contingency on a London project?
- On a refurbishment with floors and ceilings being opened up, hold 10–15% as design-and-construction contingency. On a new build with no existing fabric risk, 5–8% is usually enough. Cut contingency below those numbers only if you have a fully measured priced spec and a fixed-price contract.
- Where can I see independent London cost data?
- BCIS (Building Cost Information Service, ) publishes the most authoritative UK benchmark data. Costed's annual London Build Cost Report cross-checks BCIS against live builder quotes in our portfolio. Both are recommended reading.
