A friend of mine asked me recently ‘when you are doing a building project how do you keep to budget?’ I thought that was an interesting question – and one with a lot of potential answers.

Like all good quantity surveyors I will preach about having a good contingency figure within your budget. The contingency is there to cover any unforeseen spending that becomes necessary on your project. When we do budgets for clients, we add between 5% and 20% for a contingency. This depends upon how progressed the design is, how complicated the project I and if it is a new build, extension or refurbishment. With a new build the real risks are in the ground, i.e. when you are digging the foundations – you may find contaminated ground or big lumps of concrete – both of which are expensive to remove. With a refurbishment the risks are higher as you are dealing with an existing building that may all sorts of secrets and problems that you may need to sort out

For most projects I would always recommend that you have a fixed price with your contractor based upon an agreed scope of works. That is you both agree what work is to be carried out, what materials are to be used and what you will be paying for it. The more comprehensive you make this agreement the greater the chance that your costs won’t increase. So it is worth spending time, working through drawings if you have them (and you should unless the work is small scale), finalising your material selections and checking that your contractors quote covers everything that you need. Not only will this help you keep overspending to a minimum it should also help with the delivery of the project as everyone will know what is expected of them.

On domestic projects it is not unusual for clients to have a lot of control over the selection of a lot of the interior materials and fittings. In this instance the contractor may allocate an individual budget for each of these items (sometimes called PC Sums). Examples of these include doors, ironmongery, ceramic tiles, timber or stone flooring and the two big ones – sanitary-ware and kitchens. For example there may be an allowance of £10,000 for the supply of the kitchen and appliances or £3,000 for the supply of the sanitary-ware. The contractor will say to you ‘go and visit some showrooms and let me know what you would like’. This is where a lot of clients get carried away as they walk around showrooms imagining how certain items would look good in their houses. Before they know it, they have picked products that may exceed their contractors budget allowances. There are also all the ancillary items that are required – for example with ceramic tiling there is the grout, adhesive, trims etc. With sanitary-ware there are the wastes, connectors etc which all add to the cost. In these situations work with your contractor, if you overspend in one area you may need to reduce your budget in other areas. Costs can easily run away with you.

It is also how many people don’t manage their costs and just literally rely on adding up contractors and suppliers’ invoices to work out how much they have spent! If you have a fixed price for your project then it is relatively simple on a spreadsheet, or even a bit of paper, to log your costs and changes. Changes are a really important point. If your contractor asks you ‘would you like…’ then don’t assume that they are doing it for free. Always respond back ‘yes – but how much will it cost as I need to see if it is worth it’. Try not to say yes without knowing how much it will cost.

The last area (as I am running out of space) that you need to keep on top of is VAT. A lot of trade suppliers and contractors give prices that are exclusive of VAT. Unless you are doing a new build, most projects will attract VAT. So when you get a quote from a contractor or supplier you need to add VAT. For example going back to choosing sanitary-ware, when you are walking around a showroom and picking your bath, shower etc, unless you are in a retail showroom (like B&Q) then the prices quoted will probably be exclusive of VAT. You pick your products, give the details to the contractor and then when the bill comes in you realise it is 20% higher than you thought – all because you forgot to consider VAT! 

If you are in the lucky position where you were going to spend over £100,000 on a new car then you will probably be shopping for a premium model (probably German), built in a clean modern factory by a trained workforce who are well supervised and highly motivated. Your new car will be backed by a warranty where most, if not all faults are put right free of charge with the minimum of disruption to your day to day life.

However spending £100,000 on building works on your home can be a totally proposition and unfortunately you are not offered the same sort of guarantees of quality or after sales service.

Over the past few weeks I have seen both extremes of quality building. I am working with builders who take a real pride in their work but also a real passion to see that their customers are totally satisfied and at the other extreme I have seen new build houses which to be honest have more problems than you would think are even possible when you are buying something that costs over half a million pounds – floor that aren’t level, decoration that looks like it was done by a three year old and more leaks than a rusty wheelbarrow.

So what is key to making sure your build is completed without these problems?

I have written in previous articles about the importance of finding and appointing the right builder. I also want to reiterate that a good builder is a busy builder – especially at the current time. I was recently talking to the managing director of a Buckinghamshire based building contractor and depending on the project he is currently telling prospective clients that they will have to wait between 6-12 months for their next available slot. If your chosen builder is busy and can’t start immediately then don’t be tempted to choose second best unless there is a very good reason to do so.

 It is also very important that you inspect the works regularly – you may not be an expert in building but most of us know when something doesn’t look or feel right. If you find something then raise it with your builder and express your concerns. Don’t worry about feeling a little foolish because you will feel a lot more foolish if you don’t raise it and then when your builder has left you realise that you have a problem.

If you are not satisfied with the answers you get or you are still not happy then get advice – from your architect or designer. Ask them to come round and look – it may cost you a couple of hundred pounds but it could save you ten times that amount – if not more.

My own personal belief is that the most important factor to a quality job is quality supervision. Most builders will have a foreman on site or someone who is in charge – it may even be the owner of the building company you have employed. This person is the key and he should be supervising all the trades to make sure that they are doing it right with no short cuts. Get to know the supervisor and build a relationship with him – it is a lot lot harder to let someone down you have a personal relationship with. Let them know the importance of the build to you and your family.

Having said all of this – most problems on building projects are normally minor and can be resolved quickly and amicably but it pays to be always vigilant, always asking questions and most importantly not afraid to potentially make yourself look a little silly!