Why your extension will cost more in 2023 — and expert tips for managing your budget

Adding an extension is a way of creating extra space that can have a dramatic impact on your home, but costs remain a pertinent issue for extenders in 2023, and you may unfortunately need to budget higher than expected to complete your project.

The past couple of years has seen all sorts of challenges for those building an extension, including a building materials shortage (which has now mostly eased), a trades shortage, and rocketing material prices. But, despite these challenges, the popularity of extensions could be set to increase in 2023. 

“Because of the current mortgage rate situation and other factors, people aren’t looking to move as much as they have been. Therefore, they are looking to extend and improve,” says award-winning builder and broadcaster Andy Stevens.

To help anyone taking on an extension project this year, we spoke to a variety of industry experts to get their views on the key factors impacting extension costs in 2023, and what you can do to lower the costs of your own build.

Building materials prices are rising

If you’re working out how much does an extension cost in 2023, then it’s important to note that the aforementioned rise in building materials prices is builders’ biggest fear in 2023. 

As David Nossiter of David Nossiter Architects explains: “Material costs have increased for many reasons, such as the impact of Brexit on supply chains, together with demand due to the world recovering from a global pandemic, and this has impacted on inflation and the cost of products.”

The cost of glazing has significantly increased over the past year, as reported by Clayton Glass. And Jewson warned this week that key building materials such as bricks are rising by as much as 20% this month. 

Jewson says this is due to factors including “an increased costs for raw materials used in the production of materials, as well as increased transportation, fuel and operational costs”.

Tim Phillips, a freelance senior quantity surveyor and contributor to Homebuilding & Renovating magazine, has this advice: “One of the ways extenders can reduce price increases is by ‘buying ahead’ in any bank holiday or promotional sales i.e. kitchens and bathrooms.”

And Nossiter adds: “Plan your costs at the outset. A useful exercise is to itemise all of the main elements and then assign approximate costs. As your project develops you should be able to hone these costs. It is also beneficial to talk to contractors early.”

Builders are now busier, and their rates have increased

There is currently a major lack of labour in construction. In mid-2022, the Office of National Statistics (ONS) reported that 25% of construction businesses in the UK were experiencing skilled labour shortages. That is having a knock-on effect for homeowners wanting extension work done, particularly in the first half of the year. 

Builder Andy Stevens of Eclipse Property Solutions explains: “We haven’t really recovered from when a lot of EU workers returned home following Brexit. Decent, skilled tradespeople are in short supply and, as a result, the good ones are putting their rates up.”

With fewer tradespeople available on shorter lead times, this means that high-quality tradespeople are now booked up well in advance. “I know good contractors that are booked up until 2024,” says Stevens. “They are booked up for a reason though — they are good.”

Stevens has this advice: “Like anything in life, you get what you pay for. You don’t want to get the cheapest trades and have to pay twice. It may be worth holding off for that contractor to get the best possible job done.” 

Richard Morgan, one of the co-founders and architects of RESI, adds that extenders struggling to find tradespeople will need to be on the lookout for cowboy builders.

“There seems to be a lack of good people who do a great job therefore, you have chancers who are too cheap and people who know their worth as they are busy and do good work — and charge for it.

“Make sure you obtain references and check a builders’ previous work before arming yourself with contracts and realistic payment programmes before committing to any work.”

It costs more to go green

To combat energy price rises many of us are actively exploring how to make our homes more energy efficient, such as through the installation of higher levels of insulation to help lower running costs. 

“The interest in more energy-efficient builds and greener living has been noticed by us trades, as clients are researching more and asking for advice,” Stevens says. 

But homeowners have struggled to fund green improvements to their homes amid the energy crisis, according to a report by The i last year. 

Insulation is one of the materials that has risen sharpest in recent years, and Jewson says that the cost of PIR insulation increased by 10% at the turn of the year. 

That said, the long-term impacts of a comfortable new addition and lower energy bills more than compensate — plus, you'll also need to meet certain levels of insulation to meet Building Regulations for extensions.

Ways to lower the cost of your extension

Here, our experts offer top tips for keeping costs low if you're planning an extension in 2023.

Tim Phillips, on potential cost fluctuations:

“Extension costs depend upon so many variables that can dramatically change the overall cost — this is even before you add on the additional fees and potential hidden costs. However, looking at costs on a cost/m2 basis will give you a ballpark figure to see if an extension is potentially viable on your budget.

“For the last two to three years, builders have been working with at least six months’ work ahead of them. This is slowly going to decrease as the amount of work will fall correspondingly with house sales. I also expect labour and material prices to settle down rather than remain on the steep upward trajectory of the last three years.” 

Andy Stevens, on lowering your costs:

“If you have storage, always take delivery in case the company becomes insolvent in these testing times. Also, think about the build route for your extension; could a builder construct the ‘shell and core’ of an extension leaving you to complete the finishes and kitchen/bathroom by directly employing trades? This will definitely bring down the cost of your extension build.”

David Nossiter, on choosing your building materials:

“Previously, locally sourced materials often commanded a premium over those produced in the far East. But in some cases it is now cheaper to use locally sourced raw materials, such as glazing and kitchen appliances, rather than imported ones if you are able to.”