How to Budget for a Building Project

When you start to think about your building budget, the first thing to do is really establish how much you're able to spend. Having this figure in your head, whether it's £25,000 or £1,000,000, is a really important starting point.

Next, there’s a whole host of questions to consider. Does this amount need to include professional fees, application costs, surveys, reports and, of course, VAT? Or is it solely to cover your construction costs?

Next, what finishes are you looking for—high-end, mid, low? Would you like low-profile aluminium windows, Dekton kitchen worktops, and underfloor heating? Can you complete some of the finishing yourself, or does a family friend—who happens to be an electrician—owe you a favour?

There’s a wide range of variables that can influence your budget when undertaking construction projects. Along with a number of actual building constraints that may lead to a project becoming more expensive. In this blog, we’ll explore the crucial aspects of a budget for building projects, from getting the core brief right through to understanding costs.

The core brief

The first step of the process is working out the core brief of your project. Of course, it’s very important to understand what you want. This not only ensures the project is tailored to achieve your goals but also to accommodate your building budget.

Do you really need that? Have you heard of this alternative material? Or what about this idea?

These are questions that professionals can (and should) be asking you to make sure you get the most from your brief and budget. They work in the construction industry every day and should be able to advise you on what is and isn’t possible within your budget. They can help with what’s a fixed cost and where your budget can be stretched and flexed. The people you work with should get to know you and challenge your decisions to help achieve your brief from your budget.

It's important to remember that it can be very easy to get carried away with any level of budget for a building project. It's rare for clients to want the cheapest or lesser quality items; that's why we need to work out the details of your core brief first and then look at what's flexible. Because some elements may have to be cut back in order to splash out on others.

Balancing priorities

Spending this time with your design team to get your brief right can often cost money. At that early point in a project, it may seem like a lot of professional fees related to your budget. However, by leaning on the experience of experts within the field and using their knowledge, you’ll get the most from your investment.

But how can the questions we ask influence your decisions? Here’s a scenario that we’ve experienced a number of times to help put priorities into perspective:

You want a fairy tale evening sitting outside, watching the sunset with a G&T. Who wouldn’t? But when we scratch the surface, this scenario may not be as practical as you first thought. Let’s break it down:

• You need a space that’s large enough to seat maybe 6-8 people (a G&T on your own is not as enjoyable as it is with friends or family) — and you won’t want to be packed onto a small balcony.
• Non-slip, low-maintenance material would be great underfoot—a premium product such as Millboard decking material, perhaps?
• Then the stunning view, you don’t want that interrupted so you ask for glass guarding - without a handrail, where possible, to maximise the view.

All very legitimate reasons to build a brief. But we’ve just created a £30,000 structure. That could be the cost of a new kitchen, bathroom and money for landscaping. So instead, you can enjoy that G&T with the double doors open, watching your children run round the garden. Heck, that saving may pay for all of your professional fees which means the rest of your building can benefit.

Understanding your building budget (let's talk costs)

The Spon’s Architects’ and Builders' Price Book 2019 gives an approximate estimated building cost of £1850-£2325 per metre squared for privately developed single detached houses. This guide does not include VAT or professional fees.

In other words, it’s not cheap. And at the moment it’s not getting any cheaper. To put it into perspective, the estimated 2017 build cost was £1375-£1725 per square metre—meaning that the average increased by 35% between 2017 and 2019. That’s a big difference, and we regularly hear people quoting out-of-date figures, but the reality is your new 180m2 four-bedroom may have increased by £100,000 in just two years.

So, what can you get for your building budget? Here are a few examples from our experience on how much a project may cost:

•  A small extension to enlarge a room and an additional bedroom with minor alterations throughout.

£50,000 - £75,000

• Two-bedroom bungalow to have roof removed and raised to create more habitable space. Lose one bedroom for the new staircase and add two new bedrooms in the roof space with a new bathroom. Minor work within the existing building.

£100,000 - £150,000

• A two-bedroom bungalow with the roof removed and raised to create additional living space. The existing layout will be modified by removing one bedroom to accommodate a new staircase while adding two new bedrooms and a bathroom in the newly created roof space. Some minor adjustments will also be made within the existing building.

£200,000 - £300,000

• This three-bedroom townhouse is set for a full renovation, including a new extension at the rear to add an extra bedroom. The layout will be reconfigured to maximise space, with dampproofing and insulation installed throughout. New plumbing and electrics will accompany the updated bathrooms and kitchen. The entire interior will be replastered and finished with a modern touch.

£500,00 - £700,000

• Four-bedroom new dwelling, featuring one master bedroom with dressing room and ensuite, built on an awkward site. The design includes open-plan living spaces with some architectural points of interest. The property will boast high-quality finishes inside and out, along with landscaping, parking, and fully connected services.
  
  

Get in touch to learn more about your budget for building projects

There is a lot to understand about the construction process and how to utilise your budget for building projects effectively, so it’s important to get guidance on it as much as you can. Investing in professional help and advice will more often than not save you money from things going wrong or unexpected costs further down the line, along with support on what is often an unknown process.

Need more help defining your project and understanding the potential costs? Get in touch to arrange an informal chat or meeting.