How to set your project budget correctly.

Photo Credit: Green Chameleon

Renovations and refurbishment projects are extremely expensive endevours. It is probably the biggest chunk of money you will spend beside actually buying a house.

Yet, budget is the least favourite part of discussion between client and design professional. Clients feel, they don’t want to say anything, in case they say too much or too little. Designers do not want to say anything, in case they say too much or too little. Neither side feels comfortable talking about budget. And so discussion will continue without addressing the elephant in the room. I often wonder why that is. 

Is it a question of insecurity, lack of confidence, trust? 

Why are we so uncomfortable when addressing the project costs? 

Why are clients more comfortable asking Google how much is their project going to cost? Clients have real problems with the spaces they live in, to which designers or architects can offer amazing solutions. Project is a problem solving excercise. Understanding pros and cons of your decisions and understanding costs is an essential part of it.

We already wrote about 5 Hows about your House to help you understand its core value. Your project needs strong foundations and clear vision. Vision that is defined and delivered through good communication and collaboration within a team.

Identifying size of your budget is just as important as identifying your needs and wants. 

In the practical sense, your budget will need to cover several costs during the stages of your project.

  • Cost of professionals you hire. These will include measured survey cost, to get your existing home fully measured. Cost of architectural design professional. Fees to local authorities in case you need to obtain permissions. Cost of structural engineer’s designs and calculations, cost of party wall surveyor, cost of building control inspector, cost of project manager or your contract administrator to oversee your project progress and handle your contract administration part. There are some additional fees to bare in mind too. If you are refurbishing listed property, you may need a heritage consultant to prepare heritage report. If you are building over sewers you may need an agreement from your waste water authority. If there are some protected trees close to your property you may need additional tree survey and arboricultural report to support your planning applications. If your property is on sloping site or on many ground levels, you may need to add topographical survey. If you are in flood zone, you may need to pay for flood risk assessment. If you are in leasehold property you may need permission from freeholder, such as licence to make alterations, this can be straight forward but could also mean additional fees to solicitors in case there are complications. These professionals will form your power team, it is essential that you allow enough time to hire people that will support you along your project journey, add value, solve problems and save you time
  • Cost of building work. This will be the cost of labour and materials, that your main contractor provides. Remember, if you need to move some of the main services such as gas, electricity or if your work involves your water supply authority, these may be additional to your main contract works. Be sure you are clear on what the main contractor will be providing for the agreed price. Allow for contingencies, if you have a power team on board, with their help you will be able to identify potential additional costs by the time you start your clearance and demolition.
Photo Credit: Vitor Padua
  • Cost of second fix items. These are items, that builder or your main contractor will not be providing/supplying, such as flooring, tiles, cabinetry, work surfaces, appliances, fittings, fixtures, furniture, lighting, furnishings, etc. Make sure you are clear from the beginning on what you will be supplying so you can incorporate it into the overall budget. Items and materials listed in your Schedule of Works are predominantly building materials specified by your architectural designer and they will be supplied by your builder. However you can opt in or out when it comes to supplying items such as underfloor heating, glazing, radiators, valves, doors, ironmongery for your doors and windows, skirting boards, cornices etc. These items are generally supplied by specific trading companies and supplying them may save you money. Potentially, your architectural designer may have access to some of these and you may be able to take advantage of their trade accounts. You may also want to take control over a supply of scaffolding or skips etc. If you have time to manage this, you could potentially save some money ordering them directly. Create a spreadsheet, where you can list costs of various items you will need to purchase. You can add the links to where are you ordering them from. Don’t forget to add the cost of deliveries of these. Consider logistics around having them delivered. You may ask your main contractor to take them in and check them on arrival. One professional service that clients often forget to include is cleaning. Remember, although your contractor will clean after completion, this is mostly considered builder’s clean and you will need to scrub the place yourself or hire professional cleaning firm before you are able to move in. Another area that will certainly need your attention after your project is your front and/or rear garden. These are often destroyed through building stage, mainly due to demolition and excavation and disposal of building waste during construction. So having some contingency for light landscaping is essential.
  • Cost of finance. If you are borrowing money to fund your project, don’t forget to take into account the cost of this borrowing.
  • Cost of additional insurance. Don’t presume, that your main contractor has all appropriate insurance. CHECK IT! You do not want to start work on site without being absolutely sure that everyone including you and your home are covered. Your hired professionals will also have indemnity insurance. You will need to check with your home insurance provider whether your insurance policy covers renovations, and may need to increase your premium for the duration of construction. Be aware of your mortgage terms as well. Some mortgage providers may require you notifying them prior to work starting.
  • Cost of alternative accommodation. Don’t forget to consider where are you going to live during construction stage. Short term rental can be expensive and may take considerable amount of your budget. Additionally, allow for cost of clearing out your place prior to demolition, this may be cost of removal and storage of your home belongings.
Photo Credit: Fabian Blank

Our main task as professionals is to make sure your budget is allocated in the best way possible. We will challenge your brief, question your choices and guide you to achieve best results. 

If we do this correctly, then every penny you spend is an exchange for solution, gain of comfort, change of habit, increased efficiency, wellbeing, added value, it is a gift back to yourself.

Get the spending attitude out of your head. You are absolutely not spending your money, in fact you are investing it. What kind of investment you make will be up to you. Your renovation project or refurbishment largely means adding value. 

Addressing how you envisage return on your investment is a key. 

Photo Credit: R Architecture

Are you looking at monetary return? 

Are you looking at short term gain by selling the property in the near future? 

Are you planning to stay in the property longer? 

If it is for long term, ask yourself who will benefit from this transformation except you? 

Whose wellbeing will be affected by living in this house? Is it your partner, children perhaps? 

If your home becomes a protective space, efficient space, intuitive space for you and your loved ones, if your home inspires you, motivates you and helps you perform better, does that not seem like worthy investment? 

Do you prefer to live in the house that supports your wellbeing or in the house that causes you stress? 

Do you prefer to live in the house that is your sanctuary from the outside world or in the house that you want to escape from? 

Why shouldn’t your home feel like you are on holiday every single day?

Photo Credit: Randy Tarampi

It is time you changed your mindset about what the budget truly is. It is a tool to a tremendous improvement to your life. Set it well. Set it honestly. It needs to reflect your financial situation. After all, you can only invest what your circumstances allow. Our task is to identify and show you what can be achieved with the funds you set out. Not to boost our egos or portfolios but to truly improve your life.  

If you need advise in setting up your budget…

Perhaps you know of a person who may need this advise to avoid the same mistakes. Share the knowledge. Sharing is Caring.