According to Turner & Townsend’s International Construction Market Survey, the average cost of construction is £3,136 per sq m.

London remains the most expensive UK city in which to build. The next two most expensive UK markets, Manchester and Edinburgh, only ranked 30^th and 32^nd with average costs of £2,504 and £2,425 per sq m respectively.

UK markets have been overtaken by exceptional growth in secondary US cities such as Atlanta and Tampa, reflecting a strong US dollar and the impact of green subsidies in the States.

Real estate activity in the US has been boosted by a series of policy initiatives designed to attract investment, including the Biden administration’s Inflation Reduction Act (IRA).

Martin Sudweeks, UK managing director, Cost Management at Turner & Townsend, said: “Exceptional growth in US markets has seen a relative shift in the UK’s global ranking of the most expensive places to build.

“However, that shouldn’t be misinterpreted as a sign that the market has cooled.  While the expectation is that the rate of cost inflation will ease in the next twelve months, the overall picture is one of high competition for labour and resources.”

Looking forward in the UK the rate of inflation is expected to cool to 3.6% in 2023 as pressure on supply chains eases and demand falls, with higher interest rates increasing the cost of borrowing to finance projects.

The UK is the fourth most expensive global region for construction labour, with average wages across the nine markets £36.50 per hour.