Alex Coppock

What is a realistic budget for a building project?

by 9th Jul, 2021

Sliding doors open to the home extension. The opening leads to the open plan living area, with additional sunlight let in through the roof opening. Communion Architects, Herefordshire.Sliding doors open to the home extension. The opening leads to the open plan living area, with additional sunlight let in through the roof opening. Communion Architects, Herefordshire.

Whether it’s transforming your home so it works beautifully for you or converting a barn to create a stunning living space, an architecture project is about realising a dream.

It’s a thrilling thought but it has to be rooted in practicality. For most people, the dream has to be attached to a budget.

Of course, even if you are an experienced builder or architect, it can be hard – if not impossible – to establish whether your dream is achievable with the budget you have available. We hope this article will help.

The cost of building

Budget is fundamental to every project and it is vital to set expectations right from the start. The issue with advising on costs at the beginning of a project is that we don’t have the detail to support the numbers with any degree of accuracy. However, we have to start somewhere. In the first instance, we simply call upon our current experience of similar projects. We look to be open about what similar projects have cost. There are, of course, considerable differences between projects, but this seems to be the most sensible place to start.

Once you’ve appointed us and we’ve done a first drawing of the scheme, we do a more formal assessment at Stage One of our process. This involves measuring the size of the proposed works and then providing a cost based on a square metre rate.

We tend to advise that the building projects we work on cost in the region of £2,000 per square metre + professional fees + VAT. The £2,000 per square metre covers materials and labour.

Professional fees will include our fees and also the fees of any other specialists we need to consult such as planning consultants, structural engineers, environmental engineers and so on. It also includes planning and building control fees.

The amount of VAT that’s charged depends on the type of project. VAT is charged at 20% on home extensions. It is 5% on barn conversions. New builds are VAT exempt.

There are, of course, economies of scale – larger projects may cost slightly less per metre; smaller projects are likely to end up costing more. However, our experience is that the £2,000 per square metre + plus fees + VAT is a good starting point.

As a second step, we will often then advise appointing a Quantity Surveyor to provide a calculated ‘element by element’ forecast. This is a much more accurate method of providing a cost. This can take in more detailed matters including the different building elements, the length of walls, the number of windows, kitchens, bathrooms, external works, heat, lighting and power installations. This gives a much more certain price, and, of course, the ability to be understand where the costly parts of the building are. This allows you to make strategic decisions about the design at an early stage.

Once we have worked with everyone involved to get enough certainty to allow us to proceed, we design the building in detail. This is Stage Two of our process and it allows the project to be priced competitively against a schedule of works. This ensures that all elements of the buildings are priced at the same and allows price comparisons between contractors. This gives a very good indication of what the final project is likely to be once the project is completed. It also allows very accurate projections to be made when the project is on site.

On site at Stage Three of our process, the project will be run against the prices offered. This ensures that the risk of time overruns or material increases are not passed on to you but carried by the contractor. There are always variations required but we allow a budget for these. If there are additional costs it tends to be when clients change their requirements on site. This can easily add cost to the project, although we can estimate these to a good degree of accuracy. We can also advise on this before the additional works are undertaken. This gives our clients a good overview of the final cost of the project all the way through.

The value of engaging an architect

Architecture is about creativity. It is also about discipline. When you engage an architect you are engaging their creativity and vision. You are also engaging the expertise needed to take a project from an idea to a finished building as smoothly and safely as possible.

It is not a low cost service, but we think it offers good value – and our clients do too.

Because the services of an architect come at a price, it often only makes financial sense to engage one when your project reaches a certain size.

As a guideline, the projects we work on tend to start from around £100,000. This sounds – and is – a huge sum of money.

However, it is also realistic – and honest.

For example, on this sum, £20,000 is VAT. If a new kitchen is involved, this tends to be in the region of £10,000. Our fees for a complete project involving all our Stages will typically be around £15,000. So an initial budget of £100,000 has become a budget of £55,000.

We believe it is better for clients to start work on a project with a clear understanding of the costs involved. This saves disappointment when a project has progressed to site and it is too late. But with a clear understanding of the costs from the start, you can feel much more in control of the journey and can have greater confidence in the success of the outcome.

We told Alex at the beginning what our maximum budget was so all the way through he was working within those guidelines. The only time we actually went over our budget was when we decided to make use of the builder being on site and doing extra things.
Susan