Whether you’re renovating your house on a budget or spending £500,000, cutting home renovation costs is on everyone’s mind. The trouble with construction projects is they’re complex, and unless you’ve got an eye for detail it can be overwhelming keeping tabs on all your outgoings. But, even saving 2% of a £50k project is £1000! So it’s important to approach the project with your eyes open.
To help clear the murky waters of a home renovation’s financial workings, below we explore the four ways in which you can take control and save money on your project.
1. Details & Negotiation
2. Understanding what aspects of the project you can do yourself
3. Finding the right contractor
4. Don’t Change the Design
1. Details & Negotiation
We have exhaustively explored the benefits of a “Scope of Works” on this website. Whether your “Design & Build” contractor produces one or your architect does before going to tender, these are a MUST HAVE on any construction project. As discussed in previous posts, a “Scope of Works” is like a shopping list of all the items you’ll need to deliver your project. The more complex the project, the bigger the list - and the more expensive the project. These documents are usually accompanied by drawings to help the builder with the construction, but the most important item for pricing the project is the scope of works.
without a breakdown of every item you want a price against, you have no idea what’s being quoted for when you receive tenders back from contractors
The level of detail you go into to get quotes from builders is not fixed, it’s a sliding scale. You could get a price with a set of planning drawings only. The trouble with this if you’re not experienced, is without a breakdown of every item you want a price against, you have no idea what’s being quoted for when you receive tenders back from contractors. Does it include a price for the skips? Does it include scaffolding? Does it include VAT? Does it include the finishes? Without a detailed scope of works covering these aspects of the project, you will likely fall foul of an unscrupulous contractor, that low-balls the price initially to win the job, then follows-up by adding more and more costs to the project as it evolves.
So, the more detailed the information when tendering, the more accurate the quote and greater control over price fluctuations when delivering the project.
Finally, providing more detail at the tender stage gives you a better foothold into the negotiation process with your selected contractors. Upon receiving quotes, you’ll notice that a particular contractor may price more for one item than the other contractors. Upon reviewing this information, you’ll be able to negotiate down the price of the more expensive contractor by notifying them of their competition's price. You could potentially save thousands of pounds on a project by choosing your preferred contractor, then knocking them down in price on each item according to the process set out above.
On a final note, it’s very tempting to save money by going to the cheapest option available. Remember, there’s always a trade-off the cheaper you go. It may be either they're hiding additional costs which will be added later on, or they’re not going to deliver a good service. I would always avoid the lowest quote out of principle, unless they’re a personal recommendation.
2. What can you do yourself?
As discussed on a previous post, the project is broken down into 3 distinct stages:
Each of these stages requires a colourful team of characters to deliver the specific services necessary to progress the project forward. From architects and engineers at pre-construction to joiners and kitchen installers at fit-out.
Certain tasks at each of these stages can clearly only be delivered by a professional or specialist subcontractor. For example, structural engineering drawings and calculations can only be delivered by a qualified structural engineer. And electrical installation can now only be conducted by a certified electrician.
To be quite frank 80% of the tasks required to deliver a project are so specialist it’s almost impossible to do it yourself unless you have personal experience with that profession. However, one critical aspect of a project that’s regularly overlooked as a potential cost-saving exercise is project management. Project management services are either conducted by different professionals at different stages or by one professional all the way through. However, sometimes you can do project management yourself.
80% of the tasks required to deliver a project are so specialist it’s almost impossible to do it yourself unless you have personal experience with that profession. However, project management is one service you don't need professional experience with and can do yourself.
On small projects you’d normally appoint an architect to help project manage the pre-construction services. Unless you appoint an “architectural technician” who will just do the drawings. Architectural technicians are cheaper than traditional architects, but you will have to project manage delivering the rest of the pre-construction services yourself. This will mean appointing your own structural engineer, appointing your own party wall surveyor, appointing your own approved inspector and then tendering for contractors by yourself. You could potentially save 1-2% of your budget by doing this, but it requires a lot of work to find the different service providers, vetting them, appointing them then making sure the work they’re delivering is correct. That’s what you’d normally pay a professional architect to do.
Once pre-construction is complete, a contractor would manage the delivery of the project on-site.
To orchestrate the delivery of a construction project, you’re possibly thinking how it’s even possible for a homeowner to entertain doing that by yourself. However, some of the stages set-out above are in-fact much easier to manage than others.
We would always suggest getting a main contractor to deliver the primary construction. This is the scary bit involving putting up scaffolding, laying foundations, putting-up steelwork and external walls. It also requires specialist knowledge connecting to existing utilities supplies such as drainage and sewer networks. Trying to do this stage by yourself and organising your own foundation and steelwork contractors can be risky and time-consuming. If you tried to do it by yourself though, you could save yourself 25-30% of your budget for this stage of work. Not bad, but potentially very stressful.
The fit-out stage of the project is however much more manageable. When primary construction is finished you will essentially have a water and air tight shell connected to the existing utilities networks. All the internal walls will be in place with doors on their hinges. Any sub-floors and plaster will be completed ready for finishes to be added. Holes will be in walls in kitchens and bathrooms ready for fitting with the toilets, sinks, showers and baths. At this point, you can if you choose, take over the remaining delivery and organise bringing in your own joiners, kitchen suppliers and bathroom suppliers. As with primary construction, you set to save yourself up to 30% of this stage's costs by project managing it yourself. However this time the risks involved are significantly reduced. If you’ve ever got your kitchen re-fitted you don’t get a project manager in to do that for you, you’ll go straight to the kitchen supplier. Think of delivering the fit-out in much the same way.
3. Finding the right contractor in the right way
Taking your time to explore your options for a trustworthy & competitive contractor is perhaps the simplest way to save a lot of money on your project. But knowing where to look and what to look for when you receive tender returns is also paramount.
Jumping into bed with a company based on price alone, when you’re inviting them to work in your home, is extremely risky.
Below we break down the best vetting techniques recommended by industry professionals to check your contractors for ability and professionalism and of course price.
1. Personal recommendation
Whether it’s from a friend, acquaintance or another industry professional, a personal recommendation is a great way to verify the ability and cost of a company. You may find a simple post on facebook or similar social networks will prompt a response from friends and family recommending builders. In this instance, you should check the location of the contractors suggested and get in touch accordingly. Remember many contractors, particularly in cities, will travel a very long way to win a project so don’t just focus on builders that are right next door. In many cases builders will travel a long distance from neighbourhoods with less expensive projects to win a more “lucrative” project in a more affluent neighbourhood. By doing this you get a good builder at a very competitive price.
2. “Social Vetting”
Houzz, Trustpilot, MyBuilder and many others have become invaluable resources for construction companies when marketing their services. Getting good reviews from other homeowners is invaluable for a company brand and image. But it still leaves a number of unanswered questions for homeowners regarding construction cost. To delve deeper into the cost of your project you’ll need to obtain detailed quotes from a number of contractors who are all pricing for the project in the same way for the same items. Unless you’ve done this before you will need professional guidance during this important stage. We’ve written extensively about this process here.
3. Accounting & Business management
Many fantastic contractors get into trouble because they bite off more than they can chew. Unfortunately, when this happens they take down a project or two in the process, leaving homeowners picking up the pieces and often in a lot of debt or financial difficulty. To give yourself the best chance of avoiding this issue, a quick browse of a company's filing history, along with some difficult questions to the company director, would put your mind at ease. Remember to look for the age of the company, if it’s in debt and if it’s keeping its filing in order.
4. Don’t Change the Design!
Remember, construction companies are businesses just like any other. And like all other businesses, their principal defining characteristic is making a profit - if they didn’t make money they wouldn’t exist. So, don’t be surprised that they’ll have a number of tricks up their sleeves to coax money out of a project. It’s therefore very important as a Client that you do as much in your power to stop a contractor from easily making more money out of your project than is necessary.
It’s very important as a Client that you do as much in your power to stop a contractor from easily making more money out of your project than is necessary.
The easiest way for a contractor to make additional money from a project is when you make design changes when the project is on-site. When a room’s walls have been completed it can be tempting to start changing the layout of a bath, sink, storage or kitchen. Contractors will gladly do this for you, at an additional cost. The more of these changes you make on-site, the more the costs will rack up indefinitely. Before long, you may even find you’ve spent the budget of the project before you’ve completed it. Not a good place to be!
To avoid this, there are two options available to you:
Firstly you work with your architect and an interior designer to figure out the internal layouts and details of the project before going to contractors for quotes. This includes things like lighting layouts, storage design and plumbing. With your design team, you’ll develop internal elevations, specifications and a scope of works to itemise everything in the project. It’s then of critical importance that you then do not change your mind over the details of what’s been designed when the project is on site.
Alternatively, once you have your basic drawings completed by your architect like sorting out internal spatial arrangements - you work with a Design and Build company that will deliver the interior design for you. The advantage of this is the company delivering the internal design and layouts of the project will also deliver the construction of the project too. We’ve found on projects costing less than £150-£200k a design and build company is preferable as they’re more efficient and less expensive than traditional contractors.
At BuildUpp we offer a revolutionary matchmaking service to help homeowners find and tender for the best design and build companies for their construction projects. If you have a project in mind, why not get in touch today. We’d love to hear from you.