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If you’re planning a home extension in 2026, you’ve probably noticed the headlines about rising construction costs. The conflict in the Middle East — specifically the war involving Iran and the disruption to the Strait of Hormuz — is having a real impact on what it costs to build in the UK. But how much of that actually affects a typical home extension, and what can you do about it?
Here’s a straightforward look at what’s happening, which materials are affected, and how to plan your project sensibly without putting everything on hold.
What’s Actually Happening?
The Strait of Hormuz is a narrow waterway between Iran and Oman. Roughly a fifth of the world’s oil and gas passes through it. Since the conflict escalated in February 2026, disruption to this route has pushed global energy prices sharply upward — and when energy prices rise, construction materials follow.
That’s because many of the materials used to build extensions — cement, bricks, glass, insulation — are energy-intensive to manufacture. UK brick kilns, cement plants, and glass factories all rely on affordable energy to keep costs stable. When the price of oil and gas climbs, so does the cost of running those facilities, and those increases get passed on.
There’s a second, less obvious effect too. The UK imports a significant amount of construction products from China — things like lighting, electrics, and sanitaryware. China purchases around 90% of Iran’s oil, so Chinese manufacturing costs have risen sharply as well. That’s now feeding through into higher prices for imported goods arriving in the UK.
How Much Are Prices Rising?
Industry forecasts paint a clear picture. The Royal Institution of Chartered Surveyors (RICS) is projecting material costs to rise by around 7.5% over the coming year, with overall construction costs expected to increase by roughly 6.6%.
The Construction Products Association (CPA) has warned that if oil prices remain above $100 a barrel for four months, material costs could climb by a further 14–16%. That’s on top of a baseline that’s already approximately 37% higher than it was in 2020.
To put that in context: if your builder quoted £60,000 for an extension last year, a 7–10% material cost increase could add £4,000–£6,000 to the build cost. It’s significant, but it’s not catastrophic — especially if you plan for it.
Which Materials Are Most Affected?
Not everything is going up equally. Understanding what’s moving — and what isn’t — can help you and your builder make smarter choices.
Materials under pressure:
- Insulation, PVC, and plastics — all petrochemical-based, so directly tied to oil prices. Brands like Kingspan and Polypipe have already issued price increase notifications.
- Cement and concrete — energy-intensive manufacturing means these are among the first to feel the squeeze.
- Glass — similar story to cement. If your extension has large glazed openings or bi-fold doors, expect some uplift.
- Aluminium — prices rose 8% in March alone following production disruptions. Aluminium window and door frames are directly affected.
- Electrics and lighting — much of this is imported from China, where manufacturing costs have jumped.
Materials holding steady:
- Timber — less energy-intensive to produce and mostly sourced from the UK and Scandinavia, well away from Middle Eastern supply chains. Timber-frame construction and timber structural elements are largely unaffected.
- Brickwork for matching — while new brick production costs are rising, reclaimed and locally-sourced stock is less exposed to energy price swings.
Should You Wait?
This is the question everyone asks, and the honest answer is: probably not.
After the Russia-Ukraine war began in 2022, materials prices spiked by around 25%. Many homeowners paused their projects waiting for costs to come back down. Most of those costs never fully returned to pre-2022 levels. The baseline simply reset higher.
There’s no guarantee this time will be different. The UK still has a chronic housing shortage, demand for extensions remains strong, and the underlying cost base has been climbing for years. Waiting for a “normal” market that may never arrive means delaying the extra space your family needs now.
What matters more than timing the market is planning your project properly so you can budget with confidence and move when you’re ready.
What You Can Do Right Now
Build a realistic contingency into your budget. A 10–15% contingency on top of your builder’s quote is sensible in the current climate. This isn’t money you’ll necessarily spend — it’s a buffer that means you won’t be caught out if prices shift between quote and build.
Get your drawings done now. This is one of the smartest moves you can make. Having planning permission and building regulations drawings in place means you’re shovel-ready. When you find the right builder at the right price, you can move immediately rather than waiting another 8–12 weeks for design work. Drawings don’t expire with material prices — they hold their value regardless of what happens in the market.
Talk to your builder about materials. A good builder will be upfront about which elements of their quote are most exposed to price movement. Ask whether there are sensible substitutions — timber framing instead of steel, for example, or alternative insulation products — that could reduce your exposure without compromising quality.
Don’t over-specify where it doesn’t matter. High-end finishes are nice, but if budget is tight, focus your spending on the things that genuinely affect how the space feels and functions day-to-day. A well-designed layout with sensible materials will always outperform an over-specified extension that blew the budget before the kitchen went in.
Fix prices where you can. Some builders will hold material prices for a set period in their quote. Others will quote on a cost-plus basis where materials are passed through at whatever they cost on the day. Understand which arrangement you’re agreeing to before you sign.
The Bigger Picture
It’s worth keeping perspective. The Iran conflict is creating real cost pressure, but it’s not the first time the construction industry has faced this. The sector weathered COVID, Brexit supply chain disruption, and the Ukraine energy crisis — and people kept extending their homes through all of it.
The homeowners who came out best in each of those periods were the ones who planned carefully, budgeted honestly, and didn’t let headline anxiety stop them from getting on with a project that genuinely improved their home and their family’s quality of life.
Your extension is still worth doing. It just pays to go in with your eyes open.
Ready to get your project moving? Getting your drawings sorted now means you’re prepared to build as soon as the time is right. Get a free quote for your extension drawings — fixed-fee, no surprises, delivered online.
