Custom Software Development Cost in the UK: A Complete 2026 Guide

One of the first questions every business asks when considering custom software is: how much is this going to cost? It's a fair question — and one that deserves a straight answer, not the usual "it depends" non-answer you get from most agencies.

We've delivered over 100 software projects for UK businesses, universities, and startups over the past 15 years. In this guide, we'll share real pricing data, explain what drives cost, and give you a framework for budgeting your project accurately.

The short answer: custom software development in the UK typically costs between £15,000 and £500,000+, depending on complexity, team composition, and timeline. But that range is nearly useless without context — so let's get specific.

Why Custom Software Costs What It Does

Before we get to numbers, it's worth understanding the main cost drivers. Software pricing isn't arbitrary — it reflects real constraints.

UK developer day rates typically run £400–£850 per day for senior engineers, depending on specialisation. AI/ML engineers command a premium, often £600–£1,000/day. Project managers, designers, QA engineers, and DevOps specialists add further cost.

The big factors that determine your total bill:

• Scope and feature complexity — a simple internal tool vs. a consumer marketplace are orders of magnitude apart
• Number of integrations — connecting to third-party APIs, payment providers, CRMs, ERPs each add time
• Security and compliance requirements — healthcare (NHS/GDPR), financial services (FCA), and education projects have significant compliance overhead
• Device targets — web only is cheapest; adding native iOS + Android roughly doubles frontend cost
• Team size and seniority — more senior engineers cost more per day but ship faster
• Location of team — London-based teams command a premium over nearshore/offshore

Custom Software Cost by Project Type

Here are realistic cost ranges based on our experience across different project types.

MVPs and Proof-of-Concept Projects

£15,000 – £60,000 | 6–16 weeks

An MVP (minimum viable product) is a stripped-down version of your idea with enough features to validate the concept with real users. These projects are scoped tightly — we're not building the final product, we're building the version that proves the market exists.

What you get at this tier: core user flows, basic authentication, a database, one or two integrations (e.g. Stripe for payments, SendGrid for email), and a deployment pipeline.

What you don't get: admin panels, advanced analytics, sophisticated permission systems, or production-grade scaling. Those come in phase two.

Internal Business Tools and Dashboards

£20,000 – £80,000 | 8–20 weeks

Internal tools — reporting dashboards, CRM customisations, workflow automation, admin portals — are often the highest-ROI software projects because they directly reduce labour costs or eliminate manual errors.

A good example: we built a university admissions management system for LSHTM that automated a process taking 25+ hours per week. Total project cost: ~£45,000. Annual time savings: approximately £60,000 of staff time. ROI: positive within the first year.

At this tier you'd expect: user authentication and roles, data visualisation, integrations with existing systems (e.g. your ERP or CRM), export functionality, and a mobile-responsive UI.

Customer-Facing Web Applications

£40,000 – £150,000 | 12–30 weeks

Customer-facing apps — booking systems, e-commerce platforms, SaaS products, client portals — carry higher stakes than internal tools. Performance, security, and user experience all matter more when paying customers are involved.

At this tier: polished UI/UX design, payment processing, user accounts and profiles, notifications, search and filtering, content management, and usually a marketing landing page to go with it.

Complexity jumps significantly when you add: marketplace functionality (two-sided networks), real-time features (chat, live updates), subscription billing, or multi-tenancy (your app serves multiple separate organisations).

Mobile Applications (iOS & Android)

£35,000 – £120,000 | 10–24 weeks

Mobile apps are costed separately because the platform adds complexity. A React Native or Flutter app (cross-platform) is typically 30–40% cheaper than building separate native iOS (Swift) and Android (Kotlin) apps.

For most business apps, cross-platform is the right choice. Native development makes sense when you need deep hardware access (AR, Bluetooth, background processing) or when performance is critical (gaming, real-time trading).

Enterprise and Platform Projects

£100,000 – £500,000+ | 6–18 months

Large-scale enterprise software — ERP systems, complex multi-tenant SaaS platforms, data pipelines, AI-powered products — sit in a different category entirely. These projects require careful architecture, dedicated teams, and extended timelines.

At this tier you're typically talking about: multiple user roles and permission systems, complex business logic, integrations with 5+ external systems, data warehousing or analytics, robust security and audit trails, and ongoing infrastructure management.

The cost isn't just the build — it includes architecture design, code review, documentation, security audits, load testing, and a structured handoff if the client is taking over maintenance.

AI and Machine Learning Projects

£25,000 – £200,000+ depending on scope

AI projects are particularly hard to estimate because the cost depends on whether you're:

1. Using existing AI APIs (OpenAI, Claude, Google Gemini) — cheapest, fastest, but less customisation
2. Fine-tuning an existing open-source model (Llama, Mistral) on your data — moderate cost, high customisation
3. Training a model from scratch — expensive, only justified for unique datasets or edge deployments

Most UK business AI projects fall into category 1 or 2. A document processing AI using GPT-4 with RAG (retrieval-augmented generation) might cost £25,000–£60,000 to build and deploy. A custom-trained NLP model for a specific industry vertical might run £80,000–£150,000.

The ongoing costs also matter: API usage fees (typically £200–£2,000/month for mid-scale usage), compute costs for model hosting, and monitoring/retraining as your data evolves.

UK Agency vs. Freelancer vs. Offshore: Cost Comparison

Many businesses consider freelancers or offshore teams as a way to reduce costs. The comparison is more nuanced than day-rate arithmetic.

The risk for lower-cost options isn't primarily about code quality — plenty of offshore teams produce excellent code. The risk is communication overhead, timezone friction, misunderstood requirements, and the difficulty of course-correcting mid-project when something isn't working.

For projects under £30,000, a good senior freelancer is often the best value. For complex projects requiring coordination across design, development, QA, and infrastructure, an agency structure typically pays for itself in time saved.

Hidden Costs to Budget For

The quoted project cost is rarely the true total cost. Budget for these additional items:

• Infrastructure and hosting: £50–£500/month on AWS/GCP/Azure depending on scale
• Domain and SSL: £20–£100/year
• Third-party services: payment processing (Stripe: 1.4% + 20p per EU card transaction), email (£20–£200/month), authentication, monitoring
• Maintenance and updates: typically 15–20% of original build cost per year
• Security audits: £5,000–£20,000 for a proper penetration test
• App store fees: £25 one-off (Android), £99/year (iOS)
• Legal: GDPR data processing agreements, terms of service — budget £2,000–£5,000 for a solicitor review

How to Get an Accurate Quote

The more detail you can provide upfront, the more accurate your quote will be. When approaching a development agency, prepare:

1. A brief (1–2 pages) describing the problem you're solving and who the users are
2. A list of must-have features (Phase 1) vs. nice-to-have features (Phase 2+)
3. Any existing systems the software needs to connect to
4. Your target launch date and hard deadlines
5. Your budget range — agencies appreciate transparency and can scope accordingly
6. Examples of products or features you like (screenshots, app store links)

The best agencies will push back on scope, ask hard questions about your users, and suggest alternatives you haven't considered. Be wary of agencies that say yes to everything in a first meeting — they're either guessing or planning to expand scope later.

What a Good Software Investment Looks Like

The best way to evaluate cost is in relation to return. Consider three frameworks:

Labour displacement: If your software automates a task that currently costs £X per year in staff time, and the software costs £Y to build, the payback period is Y/X years.

Revenue enablement: If the software enables a new product or service line, what's the conservative annual revenue potential? A £50,000 investment that enables £200,000 of new annual revenue is a good investment regardless of absolute cost.

Competitive parity: In some industries, not having a certain type of software means losing deals to competitors who do. The cost of not building can be higher than the cost of building.

Summary: UK Custom Software Development Costs at a Glance

The most important thing is to work with an agency that will tell you when your budget is unrealistic for your scope — and help you find a way to get the highest-value version of your idea built within your constraints. That's the conversation we have with every client.