Budgeting for your building project
When undertaking a building project a key challenge is to manage to costs. All too often people start the process without fully understanding what is involved and how much it will cost, and are met with speed bumps and frustration along the way.
Whilst a key principle in budgeting is that cost certainty comes with design certainty, it is possible to set yourself realistic expectations before undertaking a project.
Work out your construction costs
The first step is to work out your construction costs based on the amount and type of work you’d like to do. Below are ranges of the 'base costs' for the general works, following which further specialist items can be factored in as well. Each project has a unique set of circumstances and requirements, making it difficult to establish a precise figure before kicking off the design - however this guide will help you get a better understanding of what to expect, and roughly how to apportion your budget.
Demolition Costs
Full demolition - £300 - £500/sqm
Breaking up of load-bearing masonry walls, foundations, redundant drains. Removal of structural timbers, joists etc.
Soft strip - £30 - £50/sqm
Disconnection and removal of non structural and loose items including; partition walls, windows, ceilings, kitchen appliances, sanitary ware items, electrical cabling, plumbing pipework, radiators, lighting.
Base Construction Costs
Extension - £2,000 - £2,500/sqm
The most expensive part of your project will be for the extension itself, which includes the 'hidden' elements such as structure, insulation, waterproofing and services, as well as the finishing of the new space.
Full refurbishment - £1,750 - £2,000/sqm
The areas immediately adjacent to your new extension, often the kitchen and dining spaces, will generally require full refurbishment and restructuring. Given a limited reuse of existing part of your home, the costs will be marginally less than the extension itself.
Light refurbishment - £1,000 - £1,250/sqm
For areas that you wish to upgrade with new finishes, services (such as lighting and heating) and general decoration, but that don't require any work on the hidden structure, insulation and waterproofing etc, the costs will be less again. These spaces will often be the sitting room at the front of your home, bedrooms and hallways.
Specialist items
Kitchen - £8,500 - £18,500
Varies depending on the size and shape, number of appliances, and level of specification. Kitchen design has become somewhat of a niche market in itself, and the prices can go well beyond these figures if you go for the top end.
Bathroom - £2,000 - £10,000
Again varies depending on the level of specification you choose for the fittings, and requirements such as underfloor heating. Rooms with showers and bath tubs will be at the upper end, whilst simple WCs on the ground floor will cost less.
Specialist Glazing - £1,200 - £2,000/sqm
The specialist glazing common in ground floor extensions, whether bi-fold, sliding or french, varies depending on the frame size, requirements for reducing solar glare, and level of security. Fortunately there are now many products on the market.
Work out your consultant and statutory fees
Surveys
Measured building survey - £500 - £1,500
Drainage survey - £150 - £500
Architect & Structural Engineer
Up to planning application - 3-6% construction cost
From planning approval to completion - 4-8% construction cost
Planning Application fees
Householder application - £206 + £25 admin fee
Certificate of lawfulness - £103
Discharge of planning conditions - £34 each
Additional reports (that may be required for planning)
Tree report - £550 +
Flood risk assessment - £720 +
Ecology report - £720 +
Archaeological report - £2,000 +
Historic building report - £2,000 +
Building Regulations
Varies depending on the local authority. The use of an approved inspector will cost more.
Building notice - £500 - £2,000
Full plans application (plan fee) - £500 - £2,000
Full plans application (inspection fee) - £600 - £2,500
Party Wall
If neighbours want their own surveyor - £700 - £1,000 per neighbour
Add a Contingency
Having a sufficient contingency fund is vital to factor in to your budget from day one. Despite employing all the right professionals and commissioning the surveys required, there are things that cannot be fully known until the construction begins, and you need to be prepared for things that may go wrong. Without doing so may leave your project unable to proceed whilst you gather the necessary funds.
For home renovations and extensions the rule of thumb is 10% of the total for construction and fee’s. Once established, it’s important to resist dipping into this fund to add extra items to your project, otherwise you’ll be left empty handed if something goes wrong.
Suggestions to help you stay on budget
Put the budget at the top of your wishlist. Make sure that this is the build budget not your total amount including any consultant fees. You can split the project into two main areas of expenditure - the cost of the build and the additional costs that will include statutory and professional fees, landscaping, warranties and insurances.
Work with a designer who understands building costs and can deliver something beautiful that meets your brief within your budget. Some designers might inadvertently focus on the design and throw cost out the window, and if you have a limited budget this can be disheartening and a waste of everyone’s time as you will have to go back to square one and redesign something more modest that you can realistically afford.
But don’t be afraid to enlist the advice of a cost consultant at this stage to give you another opinion on how much your project will likely cost.
Keep your project as simple as possible to meet your brief. Adding complicated elements either at the start, or worse, halfway through, will add to your budget, timeline and construction costs.
Make sure everyone works towards your rules and goals for your project, and keep them forefront of communications with your design team. If you have a set budget and that is top priority, any expensive alternatives in product or service should be ruled out and the budget and programme has more chance of being met. If the design team are aware of your project goals, these will be prioritised should the project run over cost or time for whatever reason.
Agree stage payments with your contractors, consultants and suppliers and make sure you have the funds available to pay them at the times agreed. Late payments can lead to delays in programme if your suppliers down tools until they receive payment, which in turn increases costs.
Keep on top of the budget throughout the project and aim to get updated cost estimates at each stage of the process. Designs evolve, timelines and costs of materials change so it’s a good idea to seek cost advice at key points to make sure your project budget stays on track. If the cost of one thing goes up, make sure something else in the design costs less.
Likewise, aim to get definitive costs from consultants or a quantity surveyor as soon as you have workable design drawings to price from so you know what figure you are looking at from the outset.
Make sure any extras are costed as early as possible - fitted joinery, bespoke glazing elements, electrical sockets etc. If an estimated figure is mentioned, get it costed accurately and check the costs against your original budget to stop you overspending. The more detailed drawings the consultants have to price against, the more accurate the prices will be.
If you have been redesigning and adding things to the project as it progresses and have not budgeted for these extras, you could find yourself in an undesirable situation - you will either have to find additional funds to realise these ideas or scale back the project to meet your original budget. Listen to the advice of the professionals you have engaged, and do not be afraid to revisit the designs with them to come up with a workable solution.
It is inevitable that the project budget and the project brief evolve over the duration of the project, but cost control is vital for the successful realisation of both.
Are you planning to manage the build yourself, but have no experience or cannot commit to the time involved? Perhaps consider appointing a project manager who will avoid novice mistakes that could lead to delays and cost increases, and deliver the project on time and budget on your behalf. Project managers will communicate any design changes to the whole team and keep on top of any knock on implications on your budget.
Consider phasing your project if you do not have the funds to complete everything you want in one go. If you can live with an existing kitchen for a few years while you save up for the one of your dreams, then do so. Perhaps consider splitting the work into smaller stages - and use different contractors for each, even project managing the work for the final fit-out stage yourself.
Above all else, listen to the advice of people that have done it before - your design team - and establish clear channels of communication on the design and cost elements so that you do not lose sight of your initial budget.