When planning to extend, renovate or self build the biggest question is ‘how much will it cost?’
Here are a few key tips about how to manage your budget and your expectations if you are planning a build, whether it’s an extension or a new build house. The same principles will apply.
1. Set your budget. Know exactly what funds you have available and know that it all must come in within that figure. If you start thinking ‘well, we could use a credit card if we had to or we could try to borrow a bit more on our mortgage’ it’s a slippery slope. Set. Your. Budget.
2. Work backwards. When you have set the budget, before you set your construction cost figure, work through the list of costs to take from it, such as;
• Professional fees; this will likely include an Architect, Planning consultant, Structural Engineer, Ecologist, Quantity Surveyor and an Energy Consultant.
• Vat @ 20% if you’re extending, unless it’s a new build or listed building.
• Statutory fees (Planning, Building Regulations, Insurances etc)
• Your budget may need to include purchase of land.
• A 5 – 10% contingency for any unforeseen additional costs that may occur.
Depending on your site this list could be quite long. But at the end of it, you’ll have your construction budget.
3. Work out your essential items. There might be some elements of the build that you’re just not willing to budge on. It could be a picture window seat to take in a view, a handmade kitchen – whatever your ‘must have’ items are, keep focus on them throughout the brief.
4 . Be realistic. We know that designing your home is really exciting. We are on this journey with you and we want nothing better than to see you living in and enjoying your home. A common pitfall is to get carried away with your design. You will be given guidelines about how far your budget will take you, even if you perceive additions to be small, they ALL have a cost and they add up. We don’t want you to be disappointed. Stick to your brief and stay realistic with your budget. Once you have designed your building and fully costed the build through a Quantity Surveyor or through tender – remember that every change you make will cost you money, particularly if you have started work on site. Avoid making changes late on and you will be more in control of your budget.
5 . Understand where the value lies. When you look at the quotes that come in for your project it’s easy to say, ‘they’re charging too much for that!’ I’ve got some news for you, building is expensive. Cost of materials and labour for a standard project will set you back around £2000 per sqm. excluding VAT. It is important to understand the skills required to undertake your build. It’s not simply the cost of the materials per sqm, you are paying for the skill to build to your specification, to hire the correct machinery, to deal with any issues on site, within a specified amount of time, to a high standard and to carry the risk of compliance with all statutory requirements. A main contractor takes on the liability for the site from performance of the team to suppliers delivering the right materials at the right time to health and safety on site. And you pay them to take this risk from you.
You may want to undertake some of the work yourself, this is fine but do know your limits. You want your build to be of a high quality, not only does it need to pass the regulations, you will probably want a building guarantee too. If you are not confident in undertaking certain aspects of work, outsource it. Before you undertake elements of the build yourself work out fully that a) you can do the task competently and b) that you will genuinely save money. If it takes you twice as long to undertake a task and you are paying for machinery, scaffolding or site welfare hire, work out if this is a real time saving.
If you stick to these guidelines you can avoid the yo-yo effect of trying to shoehorn your design into your ever-adjusting budget. You can be clear, from the outset what you want to achieve and the budget that is available to complete it. When you’re sitting in your lovely new home, (in your picture window!) admiring the view, you will know that it was money well spent.
Happy cost planning!
Written by Verity Lovelock. Verity is an Architect at BBD Architects, based in Romsey, Hampshire. She is passionate about self-build and renovation and arming self-builders with the knowledge to build the home of their dreams.