Labour shortages push up rebuild costs

RebuildCostASSESSMENT.com has released a new guide revealing how construction labour shortages are driving up rebuild costs and leaving a growing number of UK properties underinsured.

With the UK’s construction workforce shrinking and wages climbing, property owners face a rising threat of being left short at claim time. Our new Construction Labour Shortages & Rebuild Costs guide brings together the latest data, industry insights, and expert commentary to help brokers and property owners understand the scale of the problem and what it means for insurance cover.

Skills shortages are reshaping rebuild costs

The UK construction sector is operating with around 365,000 fewer workers than in 2008. This long-term contraction is a direct contributor to rising rebuild values. Skilled trades are becoming harder to find, and as availability drops, the cost of securing them increases.

The connection is clear. As rebuild costs climb, sums insured need to rise in turn. Otherwise, property owners may find their cover falls short when it matters most.

Labour shortages now a bigger cost driver than materials

While material prices have steadied since their pandemic-era highs, labour has emerged as the primary driver of rebuild inflation. In early 2024, average industry wages rose at their fastest rate in over 20 years. Some specialist trades saw double-digit increases in a single year, placing sustained upward pressure on the total cost of reinstatement.

The shortage also impacts project timelines. Fewer hands on site means longer rebuilds, which brings additional overheads and can push final claim costs far beyond initial expectations.

Sharon Masters, Surveyor & Technical Lead at RebuildCostASSESSMENT.com, says, “With skilled labour in short supply, rebuild costs are moving faster than many clients realise. Brokers need to treat valuations as a live risk control, not a set-and-forget admin step.”

Sharon’s advice underlines the need for frequent, accurate valuations in a cost environment that continues to change rapidly.

Take action today

The shortage of construction skills won’t resolve quickly. Until it does, rising wages and extended project timelines will continue to push up rebuild costs and widen the underinsurance gap.

Read the full Construction labour shortages, rebuild costs and the underinsurance threat report from RebuildCostASSESSMENT.com for detailed data and guidance.

Read the full report

Construction Labour Shortages, Rebuild Costs, and the Underinsurance Threat

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