Document 196834

expert help I design and budgets
How to keep
on budget and
control costs
In the third of our series,
Julian Owen looks at tenders,
fees and expenses
he biggest risk in any building
project is going over budget, with
unexpected costs revealing
themselves when quotes are
received, or even after work has started. So,
how do you balance controlling costs with
maintaining quality, and avoid running out of
money before your project is completed?
No-one can give you a reliable, accurate
prediction of the cost before you have
drawn up plans and agreed specifications only a very approximate estimate.
We all want to believe that we can get
exactly what we want at a bargain price, but
many stories about cowboy builders begin
with cheap quotes. Far better to resign
yourself to fact that you cannot afford
everything that you want, than be conned
by someone who spins you a fairytale
involving easy money.
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too broad to be of any practical help, or give
an optimistic quote to tempt you back.
Your best bet is to find a firm of architects,
design or project management professionals
that regularly work in your area, on projects
similar to yours. If it tenders regularly, it will
have a fairly good idea of the market and
how much your money will buy. Even so,
although you will get a broad range of costs
at the start, you need someone who will
keep a constant eye on the financial
implications as the design is developed.
Don't assume your project will be at the
lower end of the price range - you may have
to abandon your design if this gamble doesn't
payoff. This could be a big problem if you
have already obtained planning permission. If
the only way to cut costs is to change the
design you will have to resubmit, causing a
delay of at least two months.
Take early advice
Get plenty of quotes
Ensure that you get realistic cost advice
early. A building company is not necessarily
the best source if there are no drawings and
specifications to hand over. At this stage a
responsible builder would either tell you to
come back when you have something more
tangible, suggest a range of figures that is
When choosing a builder for any project,
get at least three quotes. For larger
domestic projects, such as a one-off house,
get at least four or five. Get an many as
possible - builders are constantly tendering
for projects, so may drop out before the
submission date if they've won a better job. t2
i ......... _
What to include in a detailed specification (a typical brick and block house)
General conditions
Rate of liquidated damages for over-running
Timing of payments
Working hours
Who will co-ordinate services
How any waste spoil or topsoil will be disposed of, or
reused on site
Floor construction: solid ground floor, or timber joists
• Concrete first floor or timber joists
Floor finish: chipboard or solid concrete
Underfloor heating requirements
Brick colour, texture, surface and pointing style
Level of insulation required
Type of cills and heads, any specialist brickwork
Types of fireplaces and fire surrounds
Pitched roof
Trussed rafters or open roof
Tile material, such as clay or concrete
Tile colour and type, such as plain or interlocking
Level of insulation required
Lead or plastic valleys
Concealed soil stack and mechanical ventilation
outlets through roof
Flat roof
Standard construction or specialist
External doors and windows
Construction and materials - uPVC, softwood, hardwood
Glazing - safety glass, triple glazing, Argon units
Style - plain casements, cottage, Georgian, real or mock
leaded lights
Ironmongery finish, and type - friction stays, letterbox
Locks - rim latches, mortice bcks, hinge bolts
Garage door type, style and mechanism
Internal doors
Construction - flush, pressed fibreboard,
timber mortice
Finish - self finished, painted, stained or varnished
Ironmongery type -lever handles or knobs, and finishesbrushed aluminium, brass finish, plastic, etc
Locks - mortice locks, bolts, etc
Bear in mind that you are likely to be
dealing with small businesses with limited
manpower. The boss will spend most of the
day managing sites and leave the
preparation of tenders to the evenings and
weekends. They will need to
plumbers, plasterers and electricians who in
turn will have to prepare their own figures to
feed into the final price tendered. All this
takes time, so to get a reliable figure allow
an adequate tender period. For a small
project this should be no less than three
weeks, preferably four, and for a one-off
house four or five weeks is reasonable.
For accurate calculations, the builders will
need to visit the site or existing building. If
they ask a lot of questions this is probably a
good thing, as it shows that they are
• Staircase construction - timber or concrete?
• Staircase joinery style, handrails, bannisters and
newel posts
• Who will fit the kitchen, and whether that includes
lighting and tiling
Fitted cupboards
• Airing cupboard
• Skirtings, trims and architraves
sanitary goods
Manufacturer and model number
• Taps and finish - chrome, brass finish, monoblock,
thermostatic mixer, etc
WC suite lid type
• Vanity units
Heating system
In a renovation, what is the existing fuel sourcegas, oil, electric?
Has the existing system been checked?
Can the existing boiler cope with the extra demand
of new rooms to heat?
In a new build, what type boiler type - combination,
mains pressured, condensing
Heating method - underfloor, radiators, air blown,
perimeter heating
Any work to the heating system or gas supply pipes is to
be carried out by a CORGI qualified plumber
Electrical services
Numbers of sockets, lights, and switches for each room,
located on a plan if possible
Types of fitting - security lights, wall mounted, pendants,
bulkhead fittings
Special circuits. such as electric cooker
Other wiring, such as computer networking cable. TV
sockets, security system
Test certificate to be issued on completion
Surface finishes
Finishes for walls, ceilings, floor
External works
Areas of hardstanding/driveway
Finish to driveway - gravel, concrete block, etc
• Type and location of new walls and fences
• Gate locations and types
• Any external features, such as pillar light, outside taps
Ponds and water features
carefully considering the information that
they have been given. Make sure all the
builders have the same details, even just
information you mention in passing on site,
so you can compare Iike-for-like.
Keep a paper trail
Take a methodical approach to finding the
right builcMr"Prepare a long list, whittling it
down to a favoured few and then. after you
have received tenders and picked the most
likely candidates, make further in-depth
checks. In the current economic climate. a
credit check is advisable if you do not know
the company.
Finally. once you have chosen your builder
work should not start until the written
contract has been signed, which will
enshrine the quote. Do not use the builder's
standard contract, or one prepared by the
contractors' organisations, as these are
usually heavily biased against your interests.
If you do find yourself using one of these
contracts. cross out any faint grey text on
the back, and exclude it in writing from any
agreement. The reason they are so hard to
read is usually because the builder doesn't
want you to look at them too closely.
Instead, use a contract prepared by the
Joint Contracts Tribunal (JCT), easily
available from most bookshops. These
documents have been agreed by all sectors
of the construction industry as fair and
reasonable. Such contracts include
provisions that make unfair increases in cost
by the contractor very difficult.
expert help I design and budgets
Key terms of a building contract
The parties
Who you are, and who the builder is. You may think this
is obvious, but some builders have more than one
company. And sometimes parties to contracts have
used the fact that they have been wrongly described in
a contract to avoid their liabilities
Identification of the works
A summary of the scope of the works. This is particularly
important if the contractor takes on other work outside
this contract, such as landscaping
Typical home alteration costs
At least 15% is recommended at early
Fees for design to planning
application stage
Vary according to the size and
complexity of the project
Planning application fee to
local authority
Planning appeal costs
Hopefully will not be needed. No fee for
making the appeal, but planning consultant
will charge for preparing your case
Fees for design to building
regulations stage
Varies according to project size and
Building regulations plans approval fee
to local authority
Typically £150 for approval and £125-£490
for site inspections (depends on size)
Fees for design work to tender stage
Varies according to project size and
Structural engineer's design work
Typically £200 to £400
Expenses for design work, (eg printing
Typically £20 to £50
Finance costs
Extension to a mortgage
Contents insurance cost
Can be very low or nothing
Party wall surveyor
If a neighbour is affected by the work and
this legislation applies, a surveyor is
usually needed to sort it out.
Building work cost
A guess until tenders are obtained
Architect's contract management fees
May not be needed for smaller projects
Remedial work to neighbour's property
affected by the works
The Party Wall Act may force you to do
this, regardless of the cost
Temporary accommodation
You will have to rent somewhere if the
house is uninhabitable during major works
Avoiding extras
A good contract, such as the JCT, should
mean that you avoid excessive extra
costs arising as work proceeds, especially if
you have had an architect prepare a
thoroughly detailed set of plans and
If there are any genuine extras - such as
landscaping, a new kitchen, furniture and
storage costs - they will be easy to identify,
and easy to price, particularly if you took the
precaution of getting a price breakdown of
each element of the job before the builder
was appointed. 0
ASBA National Architects Network
ASBA members are all registered architects
interested in working on private houses and
are RIBA members.
Julian Owen Associates 0115 922 9831
JCT Contracts available from the RIBA
Bookshop 020 7256 7222
Contract documents
It is essential to state the specific drawings, by number
and revision letter, as well as the version of the
sp-3cification. These may be different from the tender
documents if there have been revisions to price since
tenders were received
If you are using an architect or similar professional to
manage the contract on your behalf, you must make
clear what powers they have in the contract with the
builders. You should also have a matching, separate
written agreement with this contract manager
Tender sum
This has to tie in directly with the contract documents,
and must reflect any post-tender changes
Project duration and liquidated damages
The contract should clearly state the time that work is to
start, and when it is to be finished. A useful clause to
have is one that states that any unwarranted delays will
give you the right to deduct from what you pay the
builder, usually a set amount for each week. These
deductions are called liquidated damages
Payment terms
Contractors are usually paid every four weeks, or at
specific stages in the job, such as DPC level. A small
amount, usually 5%, is also held back until the end of the
job. A smaller amount is kept until six months after work
is finished (usually 2.5%)
These are items of the work that are omitted, changed
or added after the contract has been signed
The contractor must have, and maintain, adequate
insurance. This will probably not be extended to cover
items that belong exclusively to you and are stored on
site, unless you ask for it
Solving disputes
There should be a description of what parties can do if
there is a dispute, and what to do if it cannot be settled
Julian Owen is an East
chartered architect and
author of several books
on self build and house
alterations. His
publications include Self
Build, Home Extension
Design and Kit and
Modern Timber Frame
Homes. He's also
chairman of the ASBA
Architects network