contingency....how much did you use / m2

[SuperJohnG]

I’ve had varying conversations and trawled hundreds  threads of built cost /m² to try and rationalise my budget and reduce my overall anxiety towards price and also to be realistic. I think it’s important to be prepared upfront and if its not going to work reduce the house size from the outset.

 

I’m shooting for £1200/m² because it suits my ‘ideal’ budget of 240k for a 200 ^m2 house, which I believe to be a decent size, to suit my family, I have also allowed the obligatory 10% in reserve which will be ring fenced and only come into play if required. So theoretically you could say I’ve allowed £1320/ m²

 

But my concern is that it is my 1200 is driving that budget and house size. I’m aware that I wont know until the end that actual costs which could be much less going by some peoples build…but also could be much more. (I doubt I would breach 1700/m²).

 

As much as I’d love an answer to exactly how much it costs I know those answers are purely subjective. But what I do want to understand is how others have approached this from the outset? Did you wing it and pray for the best? Did you plan thoroughly and then knowing you wouldn’t meet your budget reduce the house size before starting or did you plan to use that contingency?

 

For context. My plan is to use a kit supplier to supply and erect a closed panel system, whether it be SIPS or Valutherm, get it wind and watertight then proceed with managing my own subcontractors. I don’t want the build to last years…ideally no more than 12 months. I will also correctly plan the build, schedule, cashflow and take the time to do this before even thinking of breaking ground to ensure we can derisk and identify as many problems beforehand rather than on the fly. I work full time, so it will be very difficult and we are prepared for this, ideally I’d use a main contractor but I want to avoid this to save costs…or is this just a false economy?

 

 

So really….I’m asking how long is a piece of string??!

 

I suppose my worry/anxiety/ panic is based around…what happens when it costs more…how did you deal with it. If you’d been naïve and hoped it would cost less but it cost more how did you remedy that situation??

 

Any pearls of constructive wisdom…greatly appreciated.

[PeterW]

Location, Location, Location...????

 

That will drive your costs more than anything else...

[Moonshine]

I am going through a similar process at the moment.

 

I had a chat with a client the other day who is a QS, he gave me a few things to think about and hopefully going to follow up in writing.

 

His indication of m² costs in our area (SW) are;

• Basic spec: £1,200m²
• Mid spec: £1,500m²
• High spec: £1,800m²+

These figures are just for the build no foundations, retaining walls, landscaping, services, professional fees, and anything abnormal about the build (e.g. basement tanking)

 

Personally i would work out the costs in total, and add your contingency on top of that total rather than the m² values.

[Conor]

Think of it in terms of risk. E.g. ground works and foundation works have much higher risk than say, fitting a kitchen. And the proportion of cost and programme contingency need to reflect that risk. E.g. I'm allocating 20% contingency for groundworks, and 5% for second fits, heating system etc. 

[Moonshine]

Just now, Conor said:

And the proportion of cost and programme contingency need to reflect that risk

 

I hadn't thought of it like that, and think that is a much better way.

[joe90]

With our build we used a main contractor (for the hard work?) and I did plumbing, labour for the electrician, kitchen and window fitting, all chippying, doors etc and laboured for the builder as I could. It’s 240sm and I spent £260k so comes in just over the £1000 per sm. I would not say it was high end but we have quality windows (bespoke), locally made kitchen, oak doors, MVHR and ASHP (bargain on Ebay). Frankly our budget was purely guessanomatry based on my being a retired small time builder.

[SuperJohnG]

 

13 minutes ago, PeterW said:

Location, Location, Location...????

@PeterW Central belt Scotland 

 

13 minutes ago, Moonshine said:

These figures are just for the build no foundations, retaining walls, landscaping, services, professional fees, and anything abnormal about the build (e.g. basement tanking)

@MoonshineI'm basing this purely on build costs for everything from bare ground through to the fully completed house. Ignoring landscaping and any professional fees, finance fees, planning fees, services etc. The reason for that being all those costs are either known at this stage or very accurate and risk removed. Hence I associate my costs/m^2 for materials to build the house and labour associated with that.  

 

14 minutes ago, Conor said:

I'm allocating 20% contingency for groundworks, and 5% for second fits, heating system etc. 

@Conor thats a good approach and probably a good way to further refine the build costs and contingency. 

 

I have a flat( 4 acre) plot in open countryside...I haven't actually worked out a groundwork costs but I am hoping it will be on the relatively low terms of risk and issues which can pop up. 

[nod]

We have just finished our build 

of 284 m2 

We came in at 830m2 complete 

We allowed for a 1000 m2

If we had been looking like exceeding the 1000 We could have lowered the spec and still finished with a nice house 

[Ralph]

Can't give you much wisdom on contingency but we're planning on the usual 10% knowing that I have some more in reserve if it goes wrong. I'm also borrowing a bit more than I hope I need just to mitigate risk a little more. 

 

We're using a central contractor mainly because it's taken so damn long to get to this point I just want the bloody thing built. One thing I would say is that I'm finding that the variance in cost between different contractors is massive. Same spec and from what I can tell same level of experience and some are double the others. 

[Jeremy Harris]

I'd planned on our build costing ~£1200/m², but knew we had a relatively high risk in getting out of the ground.  I mitigated that risk, at a cost, by agreeing a firm price contract for the ground works, installation of service trenches and the sewage treatment plant, and the construction of a large retaining wall.  Our costs were fixed up to the completion of ground works, and known upfront, which I found less daunting (accepting that we paid a bit extra by taking this approach).

 

That gave me the confidence to project manage the rest of the build, which went reasonably well.  Costs did creep up, not because things really went badly wrong (although problems with our borehole delayed us for nearly a year) but because we decided to upgrade some of the internal stuff.  Opting to use solid oak for all the internal joinery (stairs, skirtings, architrave etc) tripled the material cost for all that stuff, some of the choices in the kitchen went over the budgetary estimate, too, as did making a late change to the type of MVHR system, based on the very hot weather we had during the initial ground works.

 

We ended up coming in at £1380/m², so about 15% over budget, but that doesn't include all the work I chose to do to try and offset some of the cost.  I ended up doing all the plumbing, heating, hot water, MVHR, kitchen, bathroom and most of the internal joinery myself, as well as laying flooring etc.  That saved a fair bit of money, but did delay the build a fair bit.

 

 

[Ferdinand]

1 hour ago, SuperJohnG said:

So really….I’m asking how long is a piece of string??!

 

(refrains from posting Lolcat with piece of string)

 

I would suggest 15%, or even 20%, if you are doing groundworks etc, but build in some variability in your plans for finishes and plan to use part of it for unexpected upgrades if you have not needed it earlier.

 

[recoveringbuilder]

We never calculated the cost at m2 until the end, we priced up everything before starting, we had the tradesmens prices for each stage set in stone, we knew exactly from the engineers report what the foundation would be and what materials we needed. We priced up everything before starting and pretty much stuck to the budget. We parted company with the builders near the end and had to get another joiner but still within budget, I think the only thing that cropped up that we were unaware of was finding a spring in the grounds and having to get machinery in and extra drainage to deal with it. Our biggest surprise was the electric supply which we had somewhat taken for granted but eventually managed to sort out.

[Redoctober]

1 hour ago, Christine Walker said:

We never calculated the cost at m2 until the end, we priced up everything before starting, we had the tradesmens prices for each stage set in stone, we knew exactly from the engineers report what the foundation would be and what materials we needed. We priced up everything before starting and pretty much stuck to the budget. 

 

Yes, this was our approach too. We had decided what type of finish we were going for and priced it all up. Everything was agreed before a spade was put into the ground.

As long as the collective prices were within our available funds so to speak we pressed ahead. Yes there were a couple of unknowns or price differentials but nothing we couldn't cater for within our overall budget. 

That said, if things were to get out of control [ which they didn't] then we would have been able to cut back on the finishes etc to claw back the overspends etc. 

Once were out of the ground, I felt fairly confident that the budgets planned for were going to be pretty much as expected, and they were.

[Thedreamer]

My approach was to plan to put in cheap finishes (kitchen, bathroom, flooring) at the start and argue this with my lender. 

 

I calculated the contingency on each stage and when I passed this, I allocated the resources to upgrading the next stage.

 

Foundation ok (which is usually the big part of your contingency), allocate that bit to W&W stage (better slates, triple glazing, better larch, better insulation) and so on.

 

You also mentioned 12 months, personally as a young self builder I would hate that. Everybody circumstances are different but for us, even before we stuck a shovel in the ground, we converted my wife's parents loft in to a flat and once this was done, I was no longer ever stressed about finance as I was now saving a lot of money each month and it was just a matter of time. We wiped out our savings to do this but we had to take a step back and learn lessons to achieve a bigger goal.

 

You should also not get to caught in the m2, you could build 150m home for £1000 m2 and it could be worth less. If it's your forever home, value is however less important. 

 

For our build I'm not interested in the m2 or value, but more what is my all in property cost each month (mortgage, utilities/council tax and insurance etc). I currently calculate this to be around £550 a month which will mean I can always service the mortgage debt in what ever circumstances and always have a warm home.

 

Also importantly, cash is king. Don't just consider I have build cost of X with %Y contingency and this has been funded by x,y,z  are you going to be able to keep cash flowing during the build. Prime example being do your calculations for materials purchased by yourself included VAT? If you plan to buy a lot of materials you probably will have a lower final build cost but you might be looking at a creeping £15,000 VAT balance to finance till the HMRC repay you.

 

[nod]

44 minutes ago, Thedreamer said:

My approach was to plan to put in cheap finishes (kitchen, bathroom, flooring) at the start and argue this with my lender. 

 

I calculated the contingency on each stage and when I passed this, I allocated the resources to upgrading the next stage.

 

Foundation ok (which is usually the big part of your contingency), allocate that bit to W&W stage (better slates, triple glazing, better larch, better insulation) and so on.

 

You also mentioned 12 months, personally as a young self builder I would hate that. Everybody circumstances are different but for us, even before we stuck a shovel in the ground, we converted my wife's parents loft in to a flat and once this was done, I was no longer ever stressed about finance as I was now saving a lot of money each month and it was just a matter of time. We wiped out our savings to do this but we had to take a step back and learn lessons to achieve a bigger goal.

 

You should also not get to caught in the m2, you could build 150m home for £1000 m2 and it could be worth less. If it's your forever home, value is however less important. 

 

For our build I'm not interested in the m2 or value, but more what is my all in property cost each month (mortgage, utilities/council tax and insurance etc). I currently calculate this to be around £550 a month which will mean I can always service the mortgage debt in what ever circumstances and always have a warm home.

 

Also importantly, cash is king. Don't just consider I have build cost of X with %Y contingency and this has been funded by x,y,z  are you going to be able to keep cash flowing during the build. Prime example being do your calculations for materials purchased by yourself included VAT? If you plan to buy a lot of materials you probably will have a lower final build cost but you might be looking at a creeping £15,000 VAT balance to finance till the HMRC repay you.

 

I would have been happy with a Howdens kitchen 

But my wife had other ideas 

While the German kitchen and bathrooms look good 

three times as good I’m not convinced 

 

Deciding finishes and fittings up front would have made things much easier 

Had we brought contractors or a company in They would have walked off the job Several times 

[AliMcLeod]

Always remember that these sorts of posts are more likely to get response from those that are proud of their lower-than-average cost per m2, so the results here might be skewed towards that direction. I've seen at least one thread in the past where a poster would not post their cost per m2 because they were verging on being embarrassed by what it ended up at. 

 

You'll also get mixed results with some including build only, excluding founds, others will include founds, other will include plot cost, others will include professional fees. So, you are rarely comparing like with like.

 

Also, some of these builds could now be 5-6 years old, and costs could easily have gone up 15, 20, 25% in that time.

 

Saying that, £1200 per m2 is doable, but I suspect it will be a challenge unless you're taking on a bit of work yourself. Personally, for a 200m2 build in central Scotland, with a decent finish quality, I'd be budgeting £1500 m2 + 20% contingency.

 

You mention you have a 4 acre plot - have you validated that services are available to where you want the house? That can be a big cost sink.

Edited October 31, 2019 by AliMcLeod

[SteamyTea]

Isn't the idea of a contingency to just get you out of a very unexpected hole.  If, say you are working to £1200/m², and working to a m² price is only valid once the house is finished, your 5, 10, 25% contingency should not affect the overall cost greatly.

If it does, then your costing was way out to start with.

Also, does anyone account for the VAT rebate?

[Barney12]

3 minutes ago, SteamyTea said:

Isn't the idea of a contingency to just get you out of a very unexpected hole. 

 

I would agree. Well unless you have a Grand Designs film crew on-site. In which case your entire contingency will be spent before you've finished the foundations  

[Jeremy Harris]

16 minutes ago, Barney12 said:

 

I would agree. Well unless you have a Grand Designs film crew on-site. In which case your entire contingency will be spent before you've finished the foundations  

 

And your wife will be pregnant...

[redtop]

 I would say that the biggest risk is under the ground; foundations and services.  get them done and breath a sigh of relief; majority of risk removed.  I think the only major residual risk is if you haven't firm priced something like glazing which can be very expensive depending on spec.  electrics and plumbing might overspend, but not by a lot in the scheme of things.

 

that's my list anyhow:- groundworks, services, foundations and then its manageable and not scary risk and you will be able to get a proper feel for the final cost. As an aside for our 160m2 house we have spent 27k on groundworks, 26k on foundations, 22K on steel to form posts / substructure and 8k on services. so that's £83K to be ready for the building to go up; and this doesn't count professional services and we did drive the costs down as much as possible.  But then this wasn't unexpected as the site is a bugger and the groundworks included installing a publicly accessible turning head (don't ask). It will be another £100K to watertight (including glazing / roof / stairs) an then onto internals.

[Gone West]

We didn't work on a cost /m2. We had a budget based on what the house would be worth when finished and what the site was worth. We didn't want to lose money on the build but we weren't looking to make a profit, it was supposed to be a enjoyable project ?. We researched different foundation types, timber frame types etc and costed them. We always used the highest cost knowing we should be able to improve on that. For instance stairs quotes came in at between £3000 and £30000. You can always cut back on kitchens and bathrooms and our stairs came in at the lower end of our quotes. We ended up paying just under our budget. There is a lot of leeway on second finish costs.

[SuperJohnG]

All great responses so far and once the trick or treaters are gone I'll get some replies up. It does show a good variance on opinions. 

[Oz07]

Four acre plot could potentially mitigate a bit of the risk with groundworks, losing your muck away costs. Just a small thought!

[joe90]

Just to add to my input above, I had a £30k contingency (been watching too many grand designs!,!), guess what, I did not need it so instead of building my own conservatory/sunspace I had one made of Oak and erected. (Oh, and the windows were not late so I would not qualify for grand designs).

[SteamyTea]

1 minute ago, joe90 said:

I had a £30k contingency

You could get that old car working properly.