Renovation on hold: Why 2025 has become the hardest year to improve your home

If you’re thinking about renovating your house this year, you’re not alone, but you might want to hold off.

Rising costs for materials and labour, plus tougher planning rules, are making home improvements harder and more expensive than many expected.

For homeowners ready to roll up their sleeves, 2025 is turning out to be one of the toughest years to get renovation projects underway.

Construction costs have soared, squeezing budgets

Since the start of 2020, the average price of construction materials has risen by more than 37%, according to ONS data cited by Savills.

Certain essentials like insulating materials and pre-cast concrete have seen price jumps exceeding 60%. Other key supplies, including cement, bricks, plastic pipes, and metal fittings, have increased by over 50%.

This inflation extends to labour costs as well. Hudson Contracts reports that wages for electricians increased by 14.4% in the year to April 2025, while scaffolders saw a 9.3% rise.

These rising input costs have put serious pressure on renovation budgets, making some projects financially unviable.

Steven Mulholland, CEO of the Construction Plant-hire Association, says: “Construction costs have skyrocketed - this isn’t a temporary squeeze, it’s a structural problem making renovations increasingly unaffordable."

Planning permissions have dropped to a decade low

Renovators face another hurdle: people gaining planning permission has fallen sharply. The number of planning approvals for home improvements in England dropped to 151,177 in the 12 months to March 2025 - 27% below the 10-year average, according to Savills.

This drop is even more pronounced in some regions. The North East saw a 29% decrease compared to five years ago, and the Midlands and South West also experienced declines over 23%.

Lucian Cook, head of residential research at Savills, explains: “There is normally a strong link between home sales and renovations, but in 2023 this connection broke down. Buyers prefer homes that are ready to move in, avoiding the risk and hassle of renovation.”

For many homeowners, the lengthy planning process and uncertainty are reasons to delay or rethink major improvement projects.

Homeowners are delaying, downsizing, or avoiding renovations altogether

With renovation costs rising and planning permissions harder to secure, many renovators are putting projects on hold or changing their approach.

Some are scaling back from large extensions to smaller, permitted developments that don’t require formal consent, such as loft conversions without dormers or garden offices under 15 square meters.

Others are breaking projects into phases, spreading costs and labour over multiple years. Some simply opt for cosmetic upgrades or energy-efficiency improvements that cost less and have shorter timelines.

2025 is shaping up to be the most challenging year for home renovations in a decade. Rising material and labour costs, combined with a slowdown in planning permissions, have forced many homeowners to rethink their plans.

While renovation is far from impossible, it requires greater patience, careful budgeting, and often a scaled-back approach.