The London property market is booming at the moment however contractors now say they are often not tendering for contracts as they consider them to be too risky.

In the Latest Tender Cost Update, experts at Mace Group demonstrated that this trend would increase London tender cost inflation, forecasting it would grow from 3.5% to 4.5% through to 2015.

Managing Director for Mace Cost Consultancy, Chris Goldthorpe, said: “While it is still possible to obtain competitive tender returns in the regions, the London market has seen contractors unable to meet the rising demand, resulting in a selective response to tender invitations and an unwillingness to take on risk.

“It is now a regular occurrence for contractors to turn down tender opportunities, particularly if they involve single stage tendering, incomplete design information or significant construction risks.

“We are also seeing overheads and profit allowances increasing to levels that have not been seen for the last five years as competition is reduced.”

The average cost inflation for tender prices remains unchanged throughout the rest of the UK at 2% with Mace forecasting it will rise to 3% by 2016. For more information read the recent Tender Cost Update from Mace.