Trend report: cladding remediation costs

The cost of remediation varies widely depending on the area of cladding being changed. 

 

Buildings that have less than 500 sq m remediated have an average unit cost of £2,386, which is twice that of projects with more than 5,000 sq m remediated (£1,194 per sq m).

 

The Ministry of Housing, Communities and Local Government (MHCLG) published the research in December last year.

 

These figures are all from projects that are part of the Building Safety Fund, which includes high-rise (18-metre-plus) buildings with non-ACM (aluminium composite material) cladding.

A total of 300 projects were analysed in this MHCLG data release, where costs were approved between November 2020 and June 2024.

 

Unlike the size of area being remediated, building height was not found to be a predictor of unit cost. However, location is a contributing factor because of labour cost and market competition variance.

 

The mean cost per square metre of remediation is subject to some outliers that may skew the true value, therefore the data has been split into two, including and excluding outliers. If including outliers, the total unit cost for buildings with less than 500 sq m increases from an average of £2,386 to £3,076, for example. The rest of this analysis will be using the data that excluded the outliers.

 

There is a reduction in mean unit cost as the area of remediation increases in all bands other than the 3,000-5,000 sq m band, where we see an increase of £95 from the 2,000-3,000 sq m band.

 

Greater economies of scale mean remediation costs per square metre fall as the area of building remediated grows.

 

There are numerous cost elements involved in the remediation of cladding on high-rise buildings. The chief factor, the cost of removing and replacing cladding, makes up 44 per cent of the average remediation unit costs.

 

The second-largest factor on average in elemental unit costs is the main contractor’s preliminaries, at 15.9 per cent, which includes management costs, insurance and site set-up. Access makes up the third-highest element of cost, at 13.4 per cent, which includes scaffolding and other similar equipment.

 

This data covers the average unit cost of each element in the 300 projects analysed. However, variations are visible within each element, depending on the specifics of each project – such as building location, access, cladding type and the scope of the works.

 

The price of construction work has changed over the period covered, and is set to continue rising.

 

Tender prices for construction work rose 18.5 per cent between the first quarter of 2020 and the fourth quarter of 2024, according to data consultancy the Building Cost Information Service (BCIS). The figures are from its all-in tender price index, which measured contractors’ prices in tenders accepted by clients, and cover the UK.

 

Since May 2021, the index has seen a percentage increase every quarter up to and including the fourth quarter of 2024.

 

“It’s possible that the remediation scheme could be inflationary, if you’ve got limited resources like skilled labour in a particular area and increased demand,” says Karl Horton, chief data officer at BCIS. “This might account for some of the outlier prices. The general movement of input costs (labour, plant, materials) is upwards and you could typically expect any delays to projects to result in higher costs.”

 

He said the latest forecasts from BCIS predict that tender prices will increase 19 per cent between the fourth quarter of 2024 and the same period in 2029.

 

Included in the cost increases is the price of raw materials and metal products. These have also been increasing in the time period measured, according to BCIS data.

The price of copper increased by 37 per cent between January 2020 and January 2025. The price of zinc has increased by 33 per cent, coated steel by 33 per cent, aluminium by 27 per cent and fibre cement by 25 per cent. These increases are not linear, and steel prices have been particularly volatile in the period.

 

Mr Horton said: “It’s important to see the materials cost increases in the context of wider external forces, too – particularly access to raw materials and metal products with all of the global upheaval we’ve had in the last few years, the impact of volatile energy prices, and also the post-pandemic boom in demand.

 

“We’ve been speaking a lot about labour skills shortages, which is by no means a new issue, but could become increasingly inflationary if we don’t grow the workforce. This is an issue for all of construction, but when demand picks up this year, as it’s expected to, it potentially impacts the resources available to the recladding scheme and other public housing works.”

 

Labour costs are also set to increase following the rise in employers’ National Insurance contributions. The BCIS forecasts a 2.5 per cent rise in its labour costs index in April compared to March.

 

“We’ve already heard about these additional costs being factored in to tenders and, where work is under way which will continue past April, contractors will be looking at what mechanisms are available to them in contracts to claw back the additional costs they’ll see because of this. As a general rule, delaying projects means they will be more expensive because of general inflation, without adding in consideration of sudden or unexpected external impacts that may also occur – as the recent past has proven,” Mr Horton says.