Costs
What influences the cost of a construction project?
Do not be surprised if two different builders provide different prices for the same job. It is always difficult to predict construction costs, with prices fluctuating daily and affected by a plethora of factors, which include, but are not limited to, the following:
geographical location
the size, complexity and desired quality of the build
the accessibility of the site
the construction method
the availability and capacity of a reliable builder
Geographical Location
The South of England experiences some of the highest land and property costs in the UK. As well as these initial project costs, material costs are higher, and you pay a premium for the time and expertise of trades in the South.
Size, Complexity and Quality
Proportionally, smaller projects cost more per square metre than larger projects. On small projects, a larger percentage of costs will be required to facilitate the work and it will be unlikely to benefit from efficiencies of scale. The price per square metre rate will also increase if the project contains complex details, bespoke joinery, and larger specialist items such as kitchens and bathrooms, where specialist services are required on top of heightened material costs. The price usually reflects the quality of the craftsmanship, finish, or the quality of raw materials used. Clever design can enhance the appearance of simple materials, which is why architects and designers should be used to maximise a budget.
Site Access
Landlocked and difficult-to-reach sites, remote or highly congested, will increase the costs of a construction project. Although not always possible, a cost-efficient site will be large enough for material storage, and site welfare, and be large enough to undertake the contracted work.
Construction method
Most clients do not have the time, the desire, nor the skill to undertake a self-build - where they would be expected to project manage the build, procure the materials, and undertake some or all of the building work.
The most common approach is to appoint a builder to undertake the work and let them build to a predetermined design - from a set of architectural drawings and specifications. This approach means that one contractor will be responsible for the construction project, will organise the programme, and employ any sub-consultants, all for a fixed fee. The builder should not need to be paid upfront, but will require regular payments throughout the project to ensure materials can be purchased on time and work progresses in line with the construction programme.
Builder
The availability and capacity of a reliable builder will have a huge impact on your construction project. It is sometimes worth delaying your build, to align with the availability of your preferred builder. If builders don't come via a trusted personal recommendation, we recommend using builders registered with the Federation of Master Builders.
Project Costs
A project's budget can be broken down into several categories. Some of these are required to get the work completed, whereas others improve the quality of the work:
Statutory Fees
Construction work (construction materials and the cost of your builder)
VAT
Contingency
Consultants
Statutory fees
Planning Fees - Householder Planning Permission with licensed site plans is usually achievable for under £350.
The cost of an Approved Inspector varies, and an alternative approach is to use the local council's Building Regulation service. An Approved Inspector usually can devote more time to a project, so adds value for a slightly increased cost.
Construction work
Recently documented new-build square metre rates range between £2,500 - £3,500, excluding any of the high-ticket items, such as kitchens, bathrooms, bespoke glazing or high-end natural stone installations. Projects that include these elements will have a higher rate per square metre.
VAT
At the time of writing, April 2023, new builds are VAT exempt, whereas refurbishments will be required to pay 20% VAT.
Contingency
It is prudent to withhold around 15% of the overall budget as a construction contingency. This contingency is vitally important when working with existing buildings, where it is common to uncover 'unknowns' which require additional work that can not be reasonably foreseen at the design stage or before work begins on site.
Insurance
It is important to speak with your insurance provider to ensure that you have the correct type and level of building insurance in place for your specific project.
In an existing building, you may need insurance against damage caused by the renovation work, including accidental damage, theft, and fire. You may also need to consider additional insurance cover for public liability, employer's liability, and professional indemnity. For new build construction, different warranties and insurances are usually required by mortgage lenders and may be a legal requirement in some cases.
Consultants and other fees
The architectural fee should be based upon an agreed brief, scope and an agreed set of deliverables. It will usually be a fixed fee, broken down into stages that follow the RIBA Plan of Work. It is reasonable for this fee to change if additional work was requested or if there was a change to the brief. If the brief, scope or deliverables change, the fee should change accordingly - you should expect to pay less for less service and more for more!
Other disciplines are usually required to collaborate on a project during the design and planning stages of a project and may be required to do so by the council. These may include, but are not limited to, the following:
Approved Inspector - required to satisfy compliance with Building Regulations
Structural Engineer - designs will likely be required for the construction of your project and calculations will be required to satisfy Building Regulations
Mechanical and Electrical Engineering Consultant - designs will likely be required for the construction of your project
Lighting Designer - specialist designers can add value to a project through focused design and specification
Interior Designer - can add value to a project through specialist design and specification
Quantity Survey / Cost Estimator - useful to calculate the cost of the project during the design, planning and construction stages
Measured Building Survey - accurate existing information (building) is commonly required for the production of planning and design drawings
Topographical Survey - accurate existing information (site) is commonly required for the production of planning and design drawings
Arboricultural Survey / Arboricultural Impact Assessments (AIAs) - local planning authorities may request a tree survey or an arboricultural impact assessment (AIA) for trees on or adjacent to properties of land subject to planning applications
Ecological Impact Assessments (EIAs) - local planning authorities require EIAs to be carried out on some large or sensitive projects to ensure that the environmental effects can be properly considered during the planning process