How to Stay in Budget with Self Build or Renovation Project

How to Stay in Budget with Self Build or Renovation Project

Here at BBK Direct we always have the pleasure of speaking to thousands of our clients each year and this is invaluable as all our clients have a story to tell, either how they got their new build or renovation exactly right in terms of budget and design, or sometimes how they completely messed things up. Either way we get to help our clients and in return we learn allot of the do’s and don’ts when it comes to building projects and this is what we like to share, we don’t just supply the products, we are an authority in everything home improvement.

With new builds or major home renovations there is always the risk that building costs getting out of hand and start exceeding the budget that a person has set out, whether self-build or contracted build/renovation. This often forces the owners to sell the house once it is complete, depriving them of actually living in their dream home they have just built. One thing worth mentioning is that very few budget disasters have actually occurred on self-build projects as there is always that additional financial buffer that self-build creates.

We have the privilege of supplying some of the largest building contractors in the UK. Between their insight, thousands of our self-build customers and our own experience and knowledge, we have set out a couple of points to consider and follow that could save your project before it even starts.

1. Before you dream, finalise your budget

The truth is that home improvement magazines and high street showrooms always show the most amazing designs and products in lavish bathrooms, living areas, kitchens and more. But these are often as the name implies “show houses”, designed, created and showcased for the pure aim of letting clients want them and spend more than they intended. We never want to put a dampener on our articles, but we have been a trusted supplier for ages, and truth is just the truth in this economically driven society. We see this first hand on a daily basis, as clients would name all the products they want and then mention their budget and unfortunately even though we are the most competitive supply company in the UK, we just simply cannot come near their desired budget.

So first of all do your homework not only on building material costs but all other products as well, like kitchen and bathroom products, materials and finishes, this will let you design, plan and dream realistically, but you will also start finding products that let you achieve that “show house” look at a fraction of the cost.  

Secondly if you get a designer, make it clear that they must be conscious of the build budget that must be present at the very top of your requirements list. Also plans drawn in accordance with your requirements in mind must be able to be built with your set out budget, and any plans supplied that unjustifiably and grossly exceed this criteria should be deemed “unfit for use” and definitely shouldn’t be paid for.

2. Budgeting as project progresses a must

When we say you must keep on budgeting during your project, we really mean it. As a build or renovation grows with progress, changes will start to be suggested, either enhancing the build design, making the build easier or raising the value of the property. Allot of the suggested will do exactly what they in vision, but they could also blow your budget out the water, remember where you raise the budget for one section, you will have to decrease it on another. To have a budget and hope that everything will come in as such, is not going to happen, especially in an evolving design. Which self-builds generally are.

Our suggestion is to break up the entire project into smaller sections, and at each section end to take stock and recalculate your budget based on what has been saved or over capitalized on during that section. This will give you a clear vision on what to do on the following, helping you stay on your original budget. The more project sections you have the better, this will let you identify budget problems or savings early on, helping you manage, grow and evolve your project more efficiently, but also identify things before it’s too late.  

3. So what if you have project savings?

If you take up the challenge of self-build and managing the project yourself, the chance that you start seeing a saving on your initial budget is very good. NOW STOP, think first before spending it immediately on things like better outside building materials and enlarging your house etc. There is a good saying, if you don’t know what to do with your money, rather do nothing at all. It will be a good idea to put your additional budget savings into a savings pocket and there are a couple of good reasons for this.

Firstly, further down the line with your project something could go over budget and your earlier savings could absorb this. Secondly you can use your savings to purchase better appliances, units, flooring, kitchen worktops or an array of things that could raise the value of the house or make it easier to sell.

4. Make sure you have a contingency in your budget

Ten percent is generally a good figure to include into your budget as a contingency but if the property is on a slope or the ground is not compact etc. then a twenty percent contingency would be recommended. It is a big misconception that a contingency is used for one or two big building disasters, this is 98% of the time not the case, and instead it will get used in a gentle slope as costs are incurred in smaller areas. For example if the soil is extremely lose, you will have to dig your foundations deeper and use more concrete and this in turn raises labour and material costs. Couple more places your contingency money can go is, extra power points, engineered wood floors instead of laminate flooring, granite worktops instead of composites or simply just a better kitchen or bathroom and that most of the time is what you will use your contingency budget for.

5. Have realistic aspirations and don’t be scared to go back to the drawing board

Pursuing plans that you don’t have the funds to build will defiantly put a quick stop to your dreams of building your own home. So remember everything starts with your budget, then do some homework on building materials, kitchens, bathrooms and basically all finishing’s and the costs involved, this will pull your dreams more in line with your budget.

Something very important; With your constant budgeting during the build you see that costs are getting away from you because of your demands and high dreaming, don’t just continue the build, call for a stop to everything, and redirect the build on a better financial path. The couple of thousand pounds you lose by doing this, will be a drop in the ocean compared to what can be lost if you continue on your current path.

6. Watch raising costs of extras very carefully

Always make it clear to the builder or contractor that anything extra, for example garden shed and walls additional fitted units, road paving or virtually anything that was not originally discussed and planned, MUST first be discussed with yourself so that you can refer it to your original budget, so you can then make an informed and researched decision to approve or not.

This is the only way you can make sure that you do not receive any “heart stopping” surprises at the end of the build, as it is not uncommon that extras can run in excess of between 35%-45% even on a small build.

7. What if initial costings come in to high?

It’s not a strange phenomenon that initial costings come in slightly more than you hoped, even after doing your homework as to not dream bigger than you can afford. But there is still away, consider taking on parts or certain trades of the build yourself by subcontracting them out so that the builder doesn’t have the entire build from start to finish, this will allow you to cut out some of builders high profit margins and look for better deals direct from the tradesman themselves. Which the builder would have subcontracted in anyway.

8. Think seriously of phasing your building project

Let’s be honest the main focus of a build should be the main house, so if you have gone over budget due to not paying 100% attention, think of what can wait and be done a year or two latter, for instance detached garages and flat, perimeter walls etc.. also think of doing with a lesser kitchen and bathroom and rather upgrading at a later stage, especially if the house is going to be your “forever” home. This could also help you solve point 7 above.

9. Bulk material thinking is a must

If you buy allot of one material it makes sense that you will receive a better bartering stance by suppliers than purchasing small amounts of many different materials. So choose bricks or cladding that can be used for interior and exterior, and rather change the finish on them by plastering it in a different finish or painting it with different textures and colours. Also select flooring that can be used in the largest surface areas of the house, so being able to use it not only in the living area but the kitchen and bathrooms as well, for example 100% waterproof laminate flooring.

10. Avoid equipment hiring costs

This could add greatly to your costs as a self-build project, even something as simple as onsite portable toilets. If you are going to use anything for more than a week or so consider purchasing it rather and reselling it at the end of the project. This way your initial outlay will be bigger but after reselling at the end of your project it works out astronomically less than hiring it, and you will be putting money back in your savings pocket that can be used for interior upgrades at a later stage.

These would definitely be our top ten advice points when it comes to the budgeting question that is thought of by so many taking on building projects. We hope that this article has given some inspiration and confidence to take it on and make a success of it so that you and your family can enjoy your new home to the fullest and not worry about lingering costs and debt.

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