Annual rebuild cost models update by BCIS shows almost 5% increase, as conflict exacerbates uncertainty

Rebuild costs for houses and flats increased by an average of 4.9% in the year to January 2026, up from 3.8% increase recorded the previous year, according to the latest annual update to residential rebuild cost models from the Building Cost Information Service (BCIS).

Since January, reinstatement costs have risen by a further 3.7%, as measured by the ABI/BCIS House Rebuilding Cost Index (HRCI), which is used to keep sums insured up to date between assessments. This means any pre-existing underinsurance is likely to have widened further.

The release comes as Brent crude, an international benchmark of oil prices, continued to show volatility, breaching $100 a barrel for the first time since May at the end of July, amid renewed conflict. Oil is a key input to fuel and energy-intensive materials used in reinstatement work, adding further pressure to costs already tracked by BCIS.

Cos Kamasho, principal consultant at BCIS, said: “An average increase of 4.9% in reinstatement costs represents a sustained increase on the previous year. We continue to see significant variation across cost elements, with average kitchens and sanitaryware going up by 7.8% and 9.4% respectively. Aluminium and uPVC windows also recorded above average increases ranging between 5.5% and 7.5%.”

While labour costs have been the main driver of project costs for the last few years, particularly after recent increases to employers’ National Insurance Contributions and the National Living Wage, materials costs have again come under the spotlight.

Kamasho added: “Materials costs have picked up in recent months due to the effects of conflict in the Middle East, and oil prices have moved sharply again following a breakdown in the ceasefire between the US and Iran.

“The construction industry is particularly exposed to energy supply shocks given their reliance on fuel for transporting labour and materials, site plant and energy-intensive raw materials. Reinstatement work typically depends on plant and machinery for demolition and site clearance, so movements like this can feed through to rebuild costs. It's a reminder that using up-to-date data is vital for reinstatement cost assessments.”

BCIS rebuild models are also updated to reflect new legislation and regulatory requirements, including changes associated with Part L energy efficiency regulations and the forthcoming Future Homes Standard.

For more information about BCIS, please visit: www.bcis.co.uk

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Editors notes

The Building Cost Information Service (BCIS) is the leading independent provider of construction data to the built environment and insurance sectors. For 65 years, BCIS has been collecting, collating, analysing, modelling and interpreting cost information to support built environment professionals, helping them provide cost advice, to have confidence in commercial decision-making and to mitigate risk. BCIS was recognised at the Engineering Matters Awards 2024 with The Net Zero Champion Gold Award for its leading role in the development of the Built Environment Carbon Database. BCIS is shortlisted for Insurance Partner of the Year - Technology at the British Insurance Awards. www.bcis.co.uk

BCIS now has a total of 1,210 published residential rebuild models, supporting reinstatement cost assessments carried out by insurers, surveyors and loss adjusters. A further 650 ancillary models cover features such as garages, outbuildings and external works. The 2026 update includes 81 new models covering low rise Victorian/Edwardian flats.