Property renovations and extensions often end up costing thousands of pounds more than anticipated.
Labour, materials and build costs are sky-high and even small oversights or omissions from quotes can end up being costly.
Data from KPMG previously showed that 69 per cent of residential build projects go at least 10 per cent over budget, though this may be a conservative estimate.
Build process consultant Owen Gartside, who runs Build Budget Expert, said, in his experience, this represents approximately £5,000 worth of additional unplanned spending for an average single storey extension.
Even without extra costs, standard average costs are high. Data from Checkatrade suggests the average cost of a small residential extension is £48,000, rising to £120,000 for a large extension. The average cost of getting a new kitchen is about £10,550.
Stick to it: Sticking as close to the budget as possible is crucial when renovating your home
Overspending is sometimes inevitable and uncontrollable, but there are steps households can take to help ensure their renovation or extension project does not go over budget.
Gartside, who is exhibiting at the the Homebuilding & Renovating Show, and Clive Holland, a broadcaster on Fix Radio, explain how to ensure renovations stay on budget.
1. Be precise about what is and is not included
The final agreed scope of work is the description of the work being done for the price quoted.
Gartside said: ‘It could be the scope of work for the whole building project, or just for a smaller amount of additional work, such as a kitchen fit.
‘It is important for homeowners to know what is included in the scope, but it is just as important to know what is not included.
‘Items missing from the scope of work or being misunderstood can be a key reason for homeowners going over budget.’
If something is omitted from the quote, then you have not been quoted for it. If it needs doing or buying, you will need to pay the extra for it.
Taking one example, if you have an extension completed but your garden is destroyed in the process, you will want it fixing.
Yet if clearance and landscaping is not included in your quote, this is something you will have to pay extra for, which could prove very costly.
Detail matters in projects at home. So, taking another example, if you are undergoing a renovation at home, the builder may only initially quote for basic materials.
If you want details like skirting, internal doors or light fittings included, then these will have to be paid for at an additional cost, unless explicitly included in the quote.
Top tips: Owen Gartside runs Build Budget Expert and has tips for households wanting to get their renovation project completed on budget
2. Have a written contract drawn up
Always ensure you have a written contract drawn up before getting any renovation work or an extension done.
The Federation of Master Builders said: ‘Make sure you have included everything you want to spend on and put it in the contract and there will be no mistakes made by either party.
‘Include in the contract a sensible payment schedule and never pay for the entire project up front.’
Gartside added: ‘You have to have a solid starting point when it comes to your budget and it needs to be a realistic, researched amount and the project planned out to work within that budget.
‘People who don’t do this and are just hoping to hit a certain number will mostly likely not do so and be hit with lots of extra cost.’
Holland said: ‘One of the best ways to stay in control is to use a JCT contract between the client and the tradesperson/builder.
‘It clearly lays out exactly what the builder is going to do and what they expect from the client, including agreed prices and staged payments throughout the build.
‘It also gives both sides a clear reference point if things become difficult, and it can be a really useful document in the event of any legal dispute.
‘I’d always want it signed and dated by both parties before work starts.’
3. Have a healthy contingency fund
Regardless of how many spreadsheets you create or quotes you scrutinise, additional costs are still likely to crop up.
With this in mind, always ensure you have a healthy contingency fund in place before embarking on a renovation or extension project.
If a builder has, for example, quoted for a standard foundation depth for an extension, but the building inspector has stipulated a deeper dig is required, the additional cost could end up eating up a substantial slice of the contingency budget.
But you will still be in a better position with a contingency budget in place than if one never existed.
Gartside said: ‘Unforeseen costs refer to additional work that could not have been reasonably foreseen by anyone whether homeowner, designer or builder.
‘There are things you can do to try to reduce the impact of any unforeseen costs.
‘Think about each aspect of your project and ask questions such as: What is the ground like? How old is my house? Am I renovating areas of the existing house?
‘Then you can look at what possible costs may be incurred, and you may be able to allow for these in your contingency funds or make savings by planning correctly.’
Alex Peters, a cost guide expert at Checkatrade, told This is Money: ‘It is worth considering a 10 to 15 per cent contingency for your budget to cover any unexpected material cost increases or labour delays.
‘Material prices can often fluctuate so if there is a delay between the quote and work starting, it’s worth confirming if anything has increased.’
4. Watch out for delays quietly draining your budget
Ideally, your builder will have given you a project timetable which will outline when key aspects of the project are likely to take place.
Gartside said: ‘This will help you plan various other aspects of the build, from purchasing items to moving out for a period.
‘However, projects can overrun, often due to bad weather, but there can be other reasons.’
‘For example, you may miss a slot that another trade has reserved for you. This could be where a busy kitchen fitter is booked in for a fixed date, but the floor isn’t ready, and the kitchen fit has to be rescheduled.’
Keep a close on eye on key dates for the project and negotiate with all the relevant parties to try and ensure delays and costs do not go out of control.
5. Avoid rushing at any stage of the process
Getting renovation work or an extension done on a property can be a long slog. But rushing to get the project finished as quickly as possible can be risky.
Gartside said: ‘People can be very eager to get started, but rushing any element of the build process without doing the right amount of preparation and research can lead to hasty, wrong decisions.
‘Whether that’s the wrong choice of architect or builder, or you have to rework something mid build because you rushed the decision at the start and end up paying twice for the work to be done.
‘Bad decisions cost thousands so giving the right amount of time and attention to each stage of the build will save money and stress further down the line.’
6. Track your budget throughout the project
Home renovation projects and budgets can quickly get out of hand. Ensure you track your budget at every stage of the project. You need to know what is being spent and when.
Gartside added: ‘Having the full budget picture from the start is key but it also needs to be tracked throughout the build so you know what you’ve spent so far and what is left to spend.
‘That way if you do make a change during the build, it doesn’t necessarily have to be an extra cost.
‘For example, you may want to spend more on your kitchen, so you look at your bathroom budget and decide that you can reduce that spec and the amount budgeted for it without impacting on the final look.
‘This creates the extra amount in the budget for you to spend on the kitchen without it being an extra cost.’
