The real reason your home extension costs so much

Twenty years on, I run building companies across London and Surrey, and the question I get asked most is the same one: why has building work got so expensive? The honest answer is more interesting than the one you usually hear, so here it is, from someone who's priced the jobs, paid the wages, and bought the materials through all of it. The labour story everyone gets half right, the version you've heard: Brexit and Covid drove out the Eastern European workforce, and prices went up. That's true, but it's only half the story, and it's the less important half.

The numbers are stark. EU workers made up over 40% of London's construction workforce before 2018. Within three years that had collapsed to single digits, and more than 200,000 EU workers have left UK construction since 2019, with post-Brexit visa rules making them almost impossible to replace, because most trades don't meet the salary thresholds.

But here's what Brexit actually did: it ripped away the workforce that had been masking a much older problem.

When I started on site at 16, young lads coming through was normal and how the industry replaced itself. That pipeline has been broken for years. Maybe it's that every kid now thinks they'll make their money on social media instead of on the scaffold,  whatever the reason, they're not turning up. Today, 40% of the construction workforce is over 45, fewer than one in five workers is under 25, and the CITB estimates the industry needs more than 40,000 additional workers every year to the end of the decade just to keep pace.

We didn't lose our workforce to Brexit. We stopped building one twenty years ago, borrowed Europe's, and then gave it back.

I've felt the shift first-hand. When I started my company twelve years ago, there was no shortage. My phone rang constantly with tradesmen looking for work, plumbers and electricians included. Now it's the other way round: it's a fight to get good people in and keep them involved.

That fight shows up in the rates. When I was coming through, a bricklayer was on around £150 a day. Today, bricklayers are asking £250 to £350 a day, and getting it. And the truth is that even at those rates, the hard part isn't the money. It's finding someone worth paying.

The common version, "material prices went up in Covid and never came back down", is roughly right but worth being precise about, because it's not one story.

Some materials did fall back. Timber and structural steel spiked hard in 2021–22 and have since come off their peaks. What stayed stubbornly high is the energy-intensive stuff: bricks, blocks, cement, plasterboard, insulation. Those are essentially frozen energy costs baked into a product, and UK energy prices never returned to pre-2021 levels, so neither did they.

Extensions are our bread and butter, and it's where I've seen the rise most clearly when pricing jobs. As a rough like-for-like: the extension that came in around £80,000 ten years ago is now well into the realms of £120,000–£130,000. When clients ask why, the answer isn't "greedy builders",  and it isn't even really "materials" anymore. Industry data now shows labour is the main driver of cost inflation on most projects, with materials broadly stabilised at their new, higher plateau. Together, the two reset the baseline - and no mechanism brings it back down while the workforce keeps shrinking.

Why everyone's extending instead of moving? Here's the demand side of the equation, and it's why my phone hasn't stopped ringing even with prices where they are.

Take a typical family home in Surrey at £1m. Moving means a stamp duty bill north of £40,000, and that got worse, not better, when the thresholds reverted in April 2025. Add agents' fees, legals, removals and the inevitable works on the new place, and you're staring at £60,000–£80,000 in pure friction costs before you've gained a single square foot.

Then there's the factor that gets far less press but matters more in my experience: mortgages. A huge number of homeowners are sitting on fixed rates agreed before 2022, at rates that don't exist anymore, the average two-year fix in mid-2026 is still close to 6%. Moving means surrendering that rate. For many families, staying put isn't a lifestyle choice; it's basic arithmetic.

And Covid left one permanent legacy on the demand side too: working from home. The home office, the garden room, the reworked ground floor are a fixture in almost every brief we price. Put it together: the cost of moving has never been higher, the cost of staying has never been more locked in, and the house needs to do more than it ever did. Extending and refurbishing isn't the consolation prize anymore. For most of the families we build for, it's the smarter financial decision, even at today's build costs.

What does this mean if you're planning work?  Two honest pieces of advice from the contractor's side of the table:

Don't wait for prices to "come back down." They won't. The labour shortage is structural and gets worse every year as the older generation retires faster than new entrants arrive. The cheapest time to build in the next five years is probably now.

Judge quotes on who's doing the work, not the bottom line. In a market this short of skilled labour, a suspiciously cheap quote usually means one thing: the labour on your job won't be the labour you were promised. Ask who's actually on site, how long they've worked with the contractor, and what happens when the job hits a problem. In 2026, the scarce resource isn't money, it's people who know what they're doing.

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Luke Burford is the founder and Managing Director of Buckland Building Contractors, delivering residential and commercial projects across London and Surrey. He started in the industry as a bricklayer at 16. He is also part of a group of friends who have launched ‘Compare Builders’, a new platform designed to create greater trust and transparency between homeowners and reputable tradespeople www.comparebuilders.co.uk

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