Your home renovation project may well be one of the biggest investments of your life, so understanding costs and controlling risks is of the utmost importance. For successful and happy projects, expectations and available funds have to match. So, what should you consider when contemplating your project’s budget?
There are two key aspects to bear in mind:
- List the order of your project aims, and speak to your architect about how the capital build costs can be determined; this will give you an idea of your core budget. If it’s easier, gather your objectives into a spreadsheet, which will make it easier to understand their relevance and interactions with each other.
- Remember the ‘tripartite’ diagram of cost-time-quality. Of course, we all want to achieve high quality at a low cost in the least amount of time. However, it is generally recognised that the architecture and realisation of most building projects have to settle for two of these factors and these two have a direct influence on the third.
- Obtaining as much information as possible is at the heart of controlling objectives and risks. To manage your budget and to obtain the maximum value, seek to understand the process of building and where your money is going by commissioning appropriate documentation, including architects’ drawings specifications, schedules and contracts.
…And three primary components:
- 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, and electrical items, etc.
- Services connection and alterations can be unexpectedly costly items and should be avoided whenever possible.
- Allow for the costs of alternative accommodation 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 to practice to allow for things costing a bit more and taking a bit longer.
- Seek the best and most creative advice to maximise the value of your project.
- The scope of architect and consultant services required to realise your aims will be dependent on your own initiatives and capability to contribute to the process.
- Determine and plan for the fee costs of the primary consultants, which may include an architect and usually a structural engineer (whose input may be required for Building Regulation submissions)
- Allow for other fees such as Surveys, Measured Surveys, Statutory Fees (planning applications and building control inspection) and Insurances (your mortgage, for example)
- 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 more considerations:
- Online information and your architect can help with a basic ‘ballpark’ building cost estimation using devices such as our cost estimator and cost per unit area data.
- Working backwards from established available funding less the above-associated costs divided by unit cost indicators can be a guide to 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 have considerable influence on 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 useful 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.
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