What percentage should I hold as contingency?

It depends on how much is unknown. New work on an accessible, surveyed site carries less risk than opening up an old cottage, and the honest approach is to set it against a written list of unknowns.

Do I pay value added tax on building work?

It depends on the type of work. New build, certain conversions and some listed situations are treated differently from ordinary repair and improvement, so it is worth confirming your position before budgeting.

When should I set the budget?

Before the design is fixed. A budget introduced after the drawings are finished usually means redesigning, which costs time and fees.

How do I stop the budget creeping during the build?

Decide finishes and fittings before work starts, keep provisional sums few, and price every variation in writing before instructing it.

Cost control · Cornwall

Budget and contingency planning, the lines homeowners forget until the money is gone

Projects rarely go over budget because of one dramatic event. They go over because a dozen genuine costs were never in the budget in the first place, and each one is individually reasonable. A budget built properly at the start is the single most effective piece of stress reduction available on a building project, and it takes an afternoon.

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The lines that get missed

Construction cost is usually the only figure people write down. These are the ones that quietly appear later and, added together, commonly amount to a substantial proportion of the build cost.

Surveys, ground investigation, ecology reports and structural engineering
Planning fees, building control charges and any statutory agreements
Utility connections, meter moves and temporary supplies
Scaffolding, skips, welfare and site security where not in the contract
Kitchens, bathrooms, floor coverings, wardrobes, blinds and landscaping
Moving out, storage or living costs if the house is unusable during works
Value added tax, which behaves differently on new build, conversion and repair

Setting a contingency that means something

Contingency is not padding, it is a priced acknowledgement of uncertainty. New work on a known site needs less. Opening up an old Cornish cottage, where the wall build up, the foundations and the timber condition are all unknown until the plaster comes off, needs considerably more. The useful discipline is to write down what you do not yet know and set the contingency against that list, rather than picking a round percentage because it sounds prudent.

Cash flow, not just totals

Having the money is not the same as having it at the right time. Fees and surveys land early, before anything visible exists. The build then draws steadily, with peaks at the point of materials delivery. Finishes and fit out arrive last, exactly when enthusiasm and reserves are lowest. Mapping the spend across the programme prevents the classic outcome of a watertight shell and no money to finish it.

Where budgets actually escalate

In our experience it is three things: specification creep during the build, decisions deferred until the contractor needs an answer immediately, and unknown conditions in older fabric. The first two are entirely controllable by deciding earlier and writing decisions down. The third is what the contingency exists for. Design and specification detail bought up front is nearly always cheaper than the same decisions made under time pressure on site.

Frequently asked

Straight answers.

What percentage should I hold as contingency?: It depends on how much is unknown. New work on an accessible, surveyed site carries less risk than opening up an old cottage, and the honest approach is to set it against a written list of unknowns.
Do I pay value added tax on building work?: It depends on the type of work. New build, certain conversions and some listed situations are treated differently from ordinary repair and improvement, so it is worth confirming your position before budgeting.
When should I set the budget?: Before the design is fixed. A budget introduced after the drawings are finished usually means redesigning, which costs time and fees.
How do I stop the budget creeping during the build?: Decide finishes and fittings before work starts, keep provisional sums few, and price every variation in writing before instructing it.

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