Estimating construction costs – Budgeting Advice

This is a very popular question and one which is initially tricky to answer. The final estimated cost will depend on numerous factors which will become apparent through the design process.However, we understand that even at the very early stages of contemplating any design and construction works, you will be focusing on what you can feasibly achieve with your given budget. At these very early stages we can offer you some basic guidance, giving you a general understanding of the potential costs involved. To give you a rough idea of construction costs we’ve provided some useful guidance below.



Basic Rule of Thumb

If you were to take a basic single storey extension as an example, we can apply a notional rate per m2. You may have heard of estimated figures of £2000 per m2, however this figure is somewhat out of date. Through a combination of current industry data and personal experience we advise that the starting point for this rate should be £3000 per m2, however you should be aware that this figure could be higher depending on the design and specification you require.


Basic Single Storey Extension – Cost Example

As an example, the construction cost for a basic single storey extension with a footprint of 4 x 5m would be:

4m x 5m = 20m

20 x £3,000 = £60,000

Don’t forget, in addition to the build cost, there will be professional fees to consider. These professional fees will cover the costs of architects, structural engineers, planning applications, building control, etc. The amount of professional fees will depend on the scale and complexity of the design, however as a rule of thumb, you should allow for between 10% and 15% of the construction cost. Typically, smaller projects incur a higher percentage fee than larger schemes, this is because larger schemes benefit from the economy of scale. For the basic example above, you should allow:

15% of £60,000 = £9000


VAT Costs

Finally, there’s VAT to consider. VAT is currently charged at 20% you will be liable to pay VAT on all building materials and professional fees.

Construction: £60,000

+Fees: £69,000

+VAT: £82,800


If your extension includes a Kitchen or a Bathroom, you will want to increase your estimated budget. For a Kitchen you should allow an additional £15,000 + vat, and for a Bathroom £5,000 + vat. These figures are based on average costs for supply and install.


Basic Single Storey Extension with Kitchen – Cost Example

Construction: £60,000

+ Fees at: £69,000

+ Kitchen: £84,000

+ VAT: £100,800


Certain design features will also influence the cost of construction. Some of these are controllable while others are unavoidable.


Unavoidable costs

An example of unavoidable costs would be difficult ground conditions which require complex foundations. This might be a steep slope which without excavation would make the build impossible.


Controllable costs

Controllable costs are often left to the client’s discretion. They largely involve expensive materials or difficult finishes. (Floor to ceiling glass for instance requires double or triple glazing to properly insulate a home and can be expensive because of this)


How can we improve on these estimated costs?

This is where the input of a Quantity Surveyor is invaluable. As the scale, scope and specification of your design becomes more defined, so will the estimated cost. Taking a set of plans and specifications which have now been developed and refined as the project progressed a Quaintly Surveyor will be able to produce schedules and reports providing you with an updated cost plan at strategic points to ensure the intended design is still within your estimated budget.


What is Value Engineering (VE)?

Occasionally projects become too ambitious and our clients’ aspirations out-weigh their available budget. If increasing your intended budget is not an option, this is when we can look towards Value Engineering. We can guide you through the process, but essentially some items of the scheme may have to be side-lined or substituted for similar, more cost-effective alternatives. Sometimes it’s also possible to break the project into smaller phases, with less essential works being carried out at a later date when further funds become available.


We hope this has been a useful guide. If you are ready to embark with your own project, please feel free to get in touch get in touch on 01260 540170 or drop us an email at hi@arkhi.co.uk


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