The one mistake I see people make over and over again is not budgeting for their build correctly. The process I see is; get quote from a builder, work out what materials are needed, add them together and hey presto you have a total cost. NO NO NO!!
If you do not consider all the other moving parts in any building project, however big or small, you will always be without a doubt over budget, and in some cases cause cash flow issues. So what do you need to know?
Before you dive into your upcoming project, take time and consideration for the following 4 elements of the build. Compare this with the funds available, and you will be in a good position to schedule the contractors correctly and manage your budget efficiently.
1. Professionals £10,000 - £100,000
Depending on the type of build you are planning, there will be a number of professionals you will need to consult. This covers costs concerned with both design and getting the relevant permissions in place to undertake a building project. The majority of the budget here is usually paid to the architect. Whoever you choose, be sure to ask them about the following, as the likelihood is they will be able to provide these services at a lower rate than hiring all of them individually.
- structural engineers
- party wall advisors
- council fees for planning permissions and Building Regulations approval
- Steel Fabricators
- Landscape Designers
- Interior Designers
2. Site Items up to £20,000
To be compliant with Health & Safety regulations and to enable some of the construction activities such as rendering and glass work, there are certain additional items you need to factor into your costing:
- on site W.C
- scaffolding (remember most companies allow up to 6 weeks, additional time incurs additional cost. You may need to negotiate the time as the project dictates)
- site fencing/boarding
- security and safety equipment
- Waste disposal (new builds will mean a lot of clearance from the foundation work. Think about the most cost effective solution to dispose of the rubble and hardcore, i.e. Skip or disposal company)
Certain professionals will also charge per visit/per hour, so ensure you take this into account!
3. Project Management £10,000- £15,000
Why hire a project manager?
Many construction firms and architectural practices will offer project management services. So why hire someone separately?
The reason is simple. You need someone to manage every activity from the beginning of the build to the end. The architect you hire will stick around for anything involving the building, but won't get involved with any buildings they have not designed or any peripheral items such as hiring a portaloo! Similarly, the construction company will generally only stick to what they have been contracted to build.
Hiring an independent project manager will mean that all contractors have a single point of contact, as do you as the owners. They can manage everything included in the project from start to finish. Responsibilities will include arranging site visits for various contractors, ensuring materials are ordered, troubleshooting onsite issues, creating a timeline of works and reporting back on progress.
In short all the nuances of the build are taken care of by the project manager. The downside, be prepared to pay up to 15% of the total build cost for an experienced project manager. The benefit; a headache free self build!
4. The Build Cost - £1,000m2 (typical)
So now you have thought through all your costs, you can get quotations from the construction companies. To ensure you are not going out blind, expect costings at around £1,000 per square metre of building.
For internal work you need to also consider:
- Smart Home systems
The cost of the above will depend on the specifications, but ensure the quote from the construction company adds these to the quote as line items, so you can budget for this accordingly!
So How much money do you need all in all for a new build?
Let's break it down for an average 200m2, four bedroom house:
Site Items: £20,000
Raw build costs: £200,000
Project management @ 15% of raw build costs: £30,000
Construction Labour charge @ 12% :£24,000
Total project cost: £324,000
Build cost: £1,620/m2
VAT: New build projects benefit from zero VAT. This only includes anything that "belongs" to the building itself. So cement, tiles, construction bricks etc will be subject to zero VAT. However anything that will be removed from the building such as scaffolding, portaloos and services such as designers will be charged at the normal VAT rate of 20%.
I hope you found this a useful guide. Obviously costings are indicative and will depend largely on design and size of the building.
If you have embarked on a self build or are about to, I would love to hear from you! Drop me a message below and let me know how you got on and if you would add anything to the above?