The Housing Forum has today published a new report Procurement – the price we pay, which argues that procurement timelines, fragmented decision-making and risk-averse approaches are significantly increasing the cost of housebuilding, especially across the public sector.
It also identifies practical opportunities to reduce costs and increase delivery of new homes.
The report comes at a time when rising construction costs and viability pressures are already constraining the delivery of new homes across the UK.
Alex Notay, Chief Executive of The Housing Forum said: “There is growing concern about the rising cost of housebuilding and the sector’s ability to deliver the homes the UK urgently needs. What is less widely recognised is the role procurement plays in driving those costs.
“This new report identifies procurement as one of the most significant – and most controllable – drivers of development costs within the public sector.
“The good news is that these costs are not inevitable. By standardising processes, improving how risk is managed, and speeding up decision-making, we can reduce costs without compromising on quality, safety, or design”
Key recommendations include:
- Standardise procurement processes - Standardised Employers’ Requirements, collaboratively maintained over time, create clarity.
- Shift mindsets from risk transfer to risk management - Early contractor involvement enables risks to be understood and mitigated earlier, rather than simply transferred. Simply seeking to transfer unmeasurable risks onto other parties will inevitably increase the costs they will quote for the work. Instead, feedback loops - where architects and contractors regularly test design decisions against cost - can ensure design ambition remains aligned with budget.
- Speed up procurement - Standardisation, parallel approvals and faster governance cycles can all help speed up procurement. This reduces exposure to inflation, reduces risks and therefore brings costs down.
The report builds on The Housing Forum’s 2024 research, The Cost of Building a House, which estimated the average construction cost of a standard UK home at £242,000 (excluding land). Since then, Housing Forum members report continued cost inflation and mounting challenges in bringing forward viable development schemes.
The Housing Forum argues that reforming procurement practices represents one of the quickest and most practical ways for councils and housing associations to improve delivery and reduce costs within their control.
Download the new report: Procurement - the price we pay, and the path to improvement
