Rising steel building prices could hit large infrastructure schemes - including the 2012 Olympics and Crossrail and proposed skyscrapers such as the Shard of Glass, according to new research.

These building costs in London have risen 14 percent in two years and are set to rise another 14 percent in the next two years, according to research by Davis Langdon, the construction consultancy.This increase, which would be far above the rate of inflation, is expected to be especially high in the capital, where many large projects are going ahead.

The costs partly reflect the rising prices for materials, which shot up by 9.9 percent in the last year. Despite last month’s dip in metal building prices, steel is 25 percent more expensive than a year ago due to demand from China and India.

Another driver on project costs has been strong d-mand from the private and public sector, allowing contractors to pick and choose. “The industry has become much more of a sellers’ market, with contractors having more choice over the work they take on and more power to dictate contractual arrangements,” said Peter Fordham of Davis Langdon.

There is also a lack of experienced management in the field. Although the influx of workers from east Europe has solved Britain’s previous shortage of manual workers, there are still intermittent problems. “The demand for manpower often means contract labor moves on in the middle of a job for better rates elsewhere,” said Fordham.

In the past 10 years, national building costs have risen 82 percent, while retail prices have risen 31 percent.

The London Olympics have already become controversial as their estimated cost has swollen to £9.3bn. Within this, estimated construction costs have risen 12 percent from £876m to £983m in a matter of months. All prices, of course, are in pounds.

In the city center, several new towers are set to be built in the coming years – including Heron Tower, Leadenhall Tower and the “Helter-Skelter” – which will be competing for a limited pool of contractors. When projects go over-budget the additional costs may fall on either the developer or the contractor, depending on their initial agreement.

Simon Rawlinson, head of research at Davis Langdon, said commercial steel building developers were having to pay higher premiums to pass on risk to construction companies.