The numbers behind the pressure
UK building costs were 3.8% higher year-on-year as of September 2026, with Scotland running even higher at 5%. Forecasters expect a cumulative rise of around 13% over the next five years, driven primarily by materials cost, which has overtaken labour as the leading budget concern.
Why standard contingency percentages no longer work
Budgets built on historical contingency percentages, typically 5-10%, are increasingly inadequate against materials inflation running well ahead of general price rises. Projects using those old benchmarks are discovering the shortfall mid-build, when options for correcting it are far more limited.
Rebuilding budget resilience
Reforecast contingency against current, not historical, materials trend data, and build materials price review points into contracts at defined milestones rather than leaving cost risk entirely with one party. Clients and contractors who share that risk transparently tend to finish projects with fewer disputes than those who do not.
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