Building costs

A recent purchase of a ‘Homes’ glossy magazine inspired me to write this post. An article within showed a series of elegant extensions with finely detailed designs under an ‘Extensions for every budget’ title. It also listed their building costs (varying with & without VAT – see VAT and building costs post). In my experience these were considerably lower than I would expect. On the assumption that the magazine/builders/architect/client were not lying about their expenditure, I have drawn the following conclusions:

  • The magazine refers to build cost. This may be the construction contract value, i.e. not including any client-supplied subcontractors (say a flooring company), the kitchen, bathrooms or sanitaryware, the landscaping (say £300/m2), the furniture (fitted or otherwise), and possibly decorations & light fittings; and of course the big 20% slice of VAT
  • The date of completion for some of them may have been some time ago. Since the fall of the Pound against the Euro after announcing Brexit the cost of lots of building materials has risen accordingly. The Federation of Master Builders released an article stating the concern of rising material costs.

Every client I meet understandably has a budget in mind, and a maximum they feel comfortable spending. It is a rare project to be given full freedom without capping the cost. Estimating building costs is a specialist and experienced area. As a small practice, Tom Spriggs Architect Ltd, does not offer accurate cost estimating. At sketch stages to assist making broad decisions I advise clients that building work costs in the region of £2250/m2 (including VAT)*. On a typical small project to an existing building that includes knocking through internally, moving drainage, altering a bit of the original layout and building a new single storey extension, new kitchen, flooring, woodburning stove etc I apply this £2250/m2 over the whole affected area. On a few recently completed projects, this is working about correct or even a bit low in some cases. Internal fittings (kitchens and joinery), finishes or site constraints (builder access, sewers, foundations) can bump this cost up a bit by being a little unusual. One recent project extension and alteration worked out at over £3000/m2 as it was both complicated on-site and included high end fittings. It is not unusual for very high end designs in the architectural press to be considerably higher than this too.

A further problem when comparing build costs as a £/m2 rate is published prices are often spread over the country and from differing sizes of project. The larger the project, the more scales of economy and efficiencies can bring the cost down per metre. Additionally labour rates and delivery costs etc vary over the country so comparing two buildings in different regions can be difficult.

Individual sites will have their own cost burdens, be it delivery, storage, drainage, difficult neighbours, safety concerns or customers living in-situ.

On the whole, a new build house can be cheaper to build than significant alterations with like-for-like specification as the builder has more control over the cost factors, complications and phasing. On the flip side, if you can make your project work without having to demolish and build great swathes of the building you can make savings by retaining elements of an existing building – there is no one rule for all.

Should a break-down budget be required at early stages (before detailed drawings are produced) to provide a more focussed and accurate method than a broad-brush £/m2 figure, then two options present themselves.

  1. Seek expert advice from a Quantity Surveyor or QS for short (for a relatively low fee). This is their job, they estimate construction costs based on drawn information. It goes without saying that if they are working only from outline drawings, they will be making a number of assumptions and the bottom line will be either a budget estimate, or a price range. Conversations between the architect and the QS will attempt to iron out as many of these assumptions as possible, but the only way to pin a figure on the construction is with detailed drawings. Even then there will have to be allowances, or provisional sums for certain items and areas of unknown findings.
  2. Ask a builder to provide the same sort of service, based on their own costing methods. Many builders will offer this for free, on the assumption that they will be in with a favourable chance of securing the work. It is a lot of work to ask a builder to do this for nothing, so should only be done when the design is pretty fixed, or cost advice is crucial to making a decision. It should also be understood if detailed drawings are coming later, or if they will work from planning drawings only.

Criticisms of each option can include: “The QS will bump the price up to cover themselves”, and “the builder may knock the price down to secure the work”. As long as the parties involved know why they are being asked to price, and are reputable, long-standing local firms this shouldn’t really be the case.

This is not intended to scaremonger or put potential clients off, as each project is quite different, but more a word of warning against some of the magazine figures, that may raise aspirations above desired budgets.

Managing expectations is a crucial but less exciting part of the job.


*Since originally writing this post, there have been a few highly significant changes that seem to be making costs rise rapidly. Firstly the lockdowns of the Covid Pandemic interrupted the supply chains of materials, which are taking months to resolve fully as factories globally open and close; Leaving the EU has interrupted supply, taxation and payments, particularly in the smaller scale or ‘bespoke’ markets; The Suez canal blockage can’t be underestimated as it is reported that this added to the delay of materials that typically operate on a ‘just-in-time’ supply, already behind.

The difficultly currently is for builders and estimators to plan ahead for sudden price rises, which in the small contractor market of fixed prices can make the difference of builder’s livelihoods.