Top tips on how to manage your home renovation budget

Your budget will need to be split into three primary components:

1. The Building Cost

• This is the amount you pay someone to do the work, and it should be under the terms of a proper building contract. However, within your budget and pricing allocations, there might be items that are client sourced and supplied directly into the works, such as kitchen fittings, sanitary wares, ironmongery, electrical items, etc.
• Services connection and alterations can be unexpectedly costly items and should be avoided.
• Allow for alternative accommodation costs if the nature of your property’s alterations and works inhibits staying at home.
• Provide for contingencies – allow for the unforeseen during the execution of the works; it’s always best practice to allow for things to cost a bit more and take a bit longer.

2. Fees

• Seek the best and most creative advice to maximise the value of your project.
• The scope of the architect and consultant services required to realise your ambitions will depend on your strategy and capability to contribute to the process.
• Determine and plan for the fee costs of the primary consultants, which should include an architect and usually a structural engineer (whose input may be required for Building Regulation submissions)
• Allow for other fees such as Measured Building Surveys, Statutory Fees (planning applications and building control inspection) and Insurance (your mortgage, for example)

3. VAT

• Allow for paying VAT as most reputable builders and services suppliers are not likely to be exempt.
• The cost of works is likely to be discussed outside of VAT, as this is charged through your builder’s invoices and added to the architect/contract administrator’s valuations and certificates.
• Consultant fees and costs are likely to be quoted exclusive of VAT; when assessing the components of your overall project budget, check VAT status in statutory and other fees.

Here are some further points to consider:

      Estimating Costs

• Online information and your architect can help with a basic ‘ballpark’ building cost estimation using devices such as our cost calculator and cost per unit area data.
• Working backwards from established available funding, less the above-associated costs divided by unit cost indicators can guide how much space can be created or renovated.
• Be conscious of limitations in these ‘ballpark’ estimating methods, as the variables of your personal brief and a particular existing context may considerably influence the cost.

 A Specification and Schedule of Works

• Though it is sometimes possible to execute works based on well-developed and annotated drawings, when competitive tenders are deployed to test cost and seek the best value, the drawings should be complemented by a schedule of works and specification that describe the works in a standardised format.
• While the process of tenders provides comparative bids from selected builders/contractors, the detailed pricing of items in a ‘Schedule of Works’ enables the critical aspect of control and understanding of what has been contracted, as well as the inevitable management of design development.
• Priced schedules are helpful for the valuation of periodic payments, and in architect-administered contracts, they provide the basis for cost control through interim and final certification.

Written by Architect Your Home architect Andris Berzins.

For more information on how Architect Your Home can help with your renovation project, fill in our contact us form, and we’ll be in touch soon.