Home Improvement Projects Plummet Amid Soaring Costs

The number of homeowners applying to extend their properties or convert lofts has significantly decreased, with planning applications for two-storey extensions falling by 45% and single-storey extensions by 43% between 2021 and 2025, according to data from the planning platform Planning Lens. Loft conversions saw a 40% decline in applications over the same period.

These figures, based on data from 77 English councils with complete records from 2020 to 2025, indicate a substantial drop compared to pre-pandemic levels. Comparing 2025 to 2019, single-storey extension applications were down 30%, and double-storey extensions were down 36% in a subset of 48 councils with available historical data.

Experts attribute this downturn to a combination of factors, primarily higher mortgage rates and increased costs for building materials and labor. In 2021, mortgage rates were around 1%, but they have since risen to approximately 5%. This makes it more expensive for homeowners who rely on remortgaging or further advances to fund renovations.

Adding £100,000 to a mortgage over 20 years now costs £660 per month, a significant increase from £460 a month five years ago. Furthermore, building material costs have risen by 39% compared to pre-pandemic levels, according to MyBuilder, a tradesperson directory. Labor costs now constitute up to 55% of the total cost for extensions and renovations.

James Perris, managing director at De Villiers surveyors, noted that the estimated cost for a loft conversion has doubled from £25,000 to £50,000, and daily wages for tradespeople have also increased from £150 to £300. He also pointed to a reduced European workforce since Brexit and higher borrowing costs as contributing factors.

Beyond affordability, homeowners are also facing challenges in finding available tradespeople. A reported shortage in the construction industry means an estimated 47,860 additional workers are needed annually to meet demand. Data suggests 33% of Britons have recently struggled to find a suitable tradesperson.

The surge in home improvement demand following the COVID-19 pandemic, coupled with supply chain disruptions exacerbated by events like Russia's invasion of Ukraine, initially drove up material costs. While material prices have stabilized somewhat, labor costs continue to rise, adding further pressure on homeowners considering renovation projects.