NRM1 Explained: A Complete Guide for UK Construction Professionals (2026)

What Is NRM1 and Why Does It Matter?

The New Rules of Measurement (NRM) represent the definitive standard for construction cost estimating and planning in the UK. Published by the Royal Institution of Chartered Surveyors (RICS), NRM1 specifically covers order of cost estimating and cost planning for capital building works. If you work in quantity surveying, project management, or construction estimating anywhere in the UK, NRM1 is the framework that underpins how you structure and communicate costs.

Before NRM1 was introduced, the industry relied on the Standard Method of Measurement (SMM7), which had served since 1988 but was increasingly seen as outdated. NRM1 brought a more logical, hierarchical approach to cost planning that aligns with how modern construction projects are actually delivered. It was first published in 2009 and has been the accepted standard since 2012.

Understanding NRM1 is not optional for professionals who want to produce credible, bankable cost plans. Clients, funders, and main contractors all expect to see costs presented in NRM1 format. Getting it wrong, or using an ad-hoc structure, undermines confidence in your numbers before anyone even reads them.

The 14 Elements of NRM1: A Breakdown

NRM1 organises building costs into a hierarchy of groups, elements, and sub-elements. The top level consists of 14 main groups, numbered 0 through 8, plus several preliminary and overhead categories. Here is what each covers:

• Group 0 — Facilitating Works: Site clearance, demolition, toxic and hazardous material removal, major earthworks, and temporary diversions. Everything that must happen before construction begins.
• Group 1 — Substructure: Foundations, basement excavation, retaining walls, ground slabs, and all work below the lowest floor finish. This is where ground conditions heavily influence cost.
• Group 2 — Superstructure: The largest group. Includes frame, upper floors, roof, stairs, external walls, windows, external doors, and internal walls and partitions. Most of your measured quantities sit here.
• Group 3 — Internal Finishes: Wall finishes, floor finishes, and ceiling finishes. Specification choices here can swing costs significantly, from basic plaster and carpet to polished concrete and suspended ceilings.
• Group 4 — Fittings, Furnishings and Equipment: General fittings, domestic kitchen fittings, sanitary appliances, and specialist fixtures. Often underestimated in early cost plans.
• Group 5 — Services: Mechanical installations (heating, ventilation, plumbing, gas), electrical installations (power, lighting, fire alarms, security), and lift installations. Typically 30-40% of total building cost on commercial projects.
• Group 6 — Prefabricated Buildings and Building Units: Modular buildings, pods, and prefabricated units delivered to site as complete assemblies.
• Group 7 — Work to Existing Buildings: Alterations, repairs, conservation work, and cleaning of existing structures. Critical for refurbishment and heritage projects.
• Group 8 — External Works: Site preparation, roads and paths, planting, fencing, external drainage, external services, and minor building works outside the main structure.

Beyond the elemental groups, NRM1 also defines categories for Preliminaries (P), Overheads and Profit (OH&P), Contingencies, and Design Development Risks. These non-elemental costs are essential for a complete cost plan but are often handled separately from the measured works.

How the Hierarchy Works in Practice

Each group breaks down into elements, and each element into sub-elements. For example, Group 2 (Superstructure) contains Element 2.1 (Frame), which further breaks into sub-elements like 2.1.1 (Steel frames), 2.1.2 (Concrete frames), and so on. This hierarchy lets you start broad at feasibility stage and progressively add detail as the design develops, which is exactly how RIBA stages work.

At RIBA Stage 1, you might have a single line for "Superstructure" based on a cost per square metre. By Stage 3, that same section contains dozens of measured items with quantities, unit rates, and specifications. NRM1 supports this progressive refinement without changing the underlying structure.

NRM1 vs NRM2: What Is the Difference?

A common source of confusion is the difference between NRM1 and NRM2. The distinction is straightforward:

• NRM1 is for cost estimating and cost planning. You use it during design stages to establish budgets and track costs as the design develops.
• NRM2 is for detailed measurement and billing. You use it to produce bills of quantities for tendering, where every item is measured to precise rules for contractors to price.

Think of NRM1 as the planning tool and NRM2 as the procurement tool. On most projects, you start with NRM1 cost plans and transition to NRM2 bills of quantities when you go to tender. The elemental structure is broadly consistent between the two, which makes that transition smoother.

How NRM1 Structures a Bill of Quantities

A bill of quantities (BoQ) structured to NRM1 follows the elemental breakdown described above. Each section of the BoQ corresponds to an NRM1 group, and within each section, items are organised by element and sub-element. This gives the reader a clear picture of where money is being spent across the building.

A well-structured NRM1 BoQ typically includes the following for each item: a description referencing the NRM1 code, the unit of measurement (m, m², m³, nr, item), the measured quantity, a unit rate, and the total cost. Preliminaries, contingencies, and overheads appear as separate sections at the end.

The benefit of this structure is comparability. When a client receives three tender returns, all structured to NRM1, they can compare like with like across every element. Without a standard structure, comparing tenders becomes guesswork.

Common Pitfalls When Using NRM1

• Mixing NRM1 and trade-based formats: Some practitioners default to trade-based bills (brickwork, carpentry, plumbing) rather than elemental. This makes cost analysis and benchmarking much harder.
• Forgetting preliminaries: NRM1 treats preliminaries as a defined category with its own sub-elements. Lumping them into a single percentage is lazy and often inaccurate.
• Ignoring Group 0: Facilitating works are frequently underestimated because they depend on site-specific conditions that are unknown at early stages. Always flag this risk.
• Under-measuring services: Group 5 is complex and expensive. Using a percentage allowance instead of measuring services properly can blow your cost plan apart at tender stage.

How MyQS Automates NRM1 Categorisation

Manually categorising every BoQ line item to the correct NRM1 element is time-consuming and error-prone. This is one of the areas where automation delivers real value. MyQS uses AI to automatically assign NRM1 codes to every item in your bill of quantities, whether the quote was generated from photos, text descriptions, voice notes, or floor plans.

When you create a project in MyQS, the system analyses your inputs, generates measured items, and maps each one to the appropriate NRM1 group, element, and sub-element. The Build Pro pipeline goes further by extracting quantities from uploaded construction drawings and producing a fully structured NRM1 BoQ with five distinct processing steps.

This means you get a professional, RICS-aligned cost plan in minutes rather than hours, with consistent categorisation across every project. You can review and adjust any item, but the heavy lifting of classification is handled automatically.

Frequently Asked Questions

Is NRM1 mandatory for all UK construction projects?

NRM1 is not legally mandatory, but it is the accepted industry standard endorsed by RICS. Most public sector projects and many private sector clients require NRM1-formatted cost plans. If you are producing cost estimates professionally, using NRM1 is expected.

Can I use NRM1 for residential projects as well as commercial?

Yes. NRM1 applies to all building types, including residential, commercial, industrial, and mixed-use. The elemental structure works regardless of building function. For smaller residential projects, you may not need to break down to the sub-element level, but the group and element structure still provides a useful framework.

How does NRM1 handle inflation and regional cost differences?

NRM1 itself does not prescribe specific rates or indices. It provides the measurement framework. You apply your own rates, which should reflect current market conditions and location factors. Most QS practices use published indices like BCIS to adjust rates for region and inflation, then apply those adjusted rates within the NRM1 structure.