Feel sick with worry about escalating build costs

[Jude1234]

Our house is being built by a main contractor who provided one of those HBXL estimates at the beginning of the project.  It was very clear what was included and excluded.  However now that we are 3/4 of the way through and I asked him for an update on the situation on the build vs the estimates and we are way over.  Firstly it said on the front sheet that in the estimate they had allowed approx £17,000 for sanitary ware.  I had sourced these on the internet for about £7000 so I felt good that I had 'saved' £10,000 from the budget.  Then they said the garage would cost about £10,000, now they are saying it will cost £18,000, of which we have already paid about half, so no turning back we are committed to having a big garage.  We have also committed to all the bathroom and kitchen items (all bought and in case of the kitchen fitted).  Because we are both absolutely useless at anything in the house we are reliant on trades to finish off, there is nothing that we would feel comfortable doing ourselves, not even the painting as we don't want to ruin it.  I am trying to think of ways to reduce costs but really struggling.  If we delay some stuff then we will be in our rental for longer (which is driving us mad) and we will still need to pay for stuff eventually.  |I am kicking myself that I have not kept a closer eye on costs earlier on and asked how much everything was going to cost before I agreed to it.  For example we chose lovely brushed chrome sockets, light switches etc but have no idea the cost.  The electrician went ahead and ordered them and now they can't be returned (I did ask if we could change to cheaper plastic ones upstairs for instance).

 

I feel so responsible for getting us in to this mess as it was me that wanted to self build, my husband would have been happier to buy something that would have been cheaper.  He has left all of the planning etc to me as he is so busy and stressed at work.  I don't feel I can talk to him about it and get him more stressed.

[Declan52]

Ok take a breather and have a sit down with the builder and explain to him that as costs are starting to spiral you want to be more involved in this aspect. 

From now on you want prices for each part that is to be completed. As in for a basic finish, a med quality finish and a top quality finish. Then you pick the winner. You can't always go for the top quality no matter how much you want it if the budget is tight. Nothing is too be done without you signing of on it. This esp applies to all the lovely extras that the builder might be suggesting. 

Thing's like your plug sockets for example are easy changed further down the line. Same goes with light fittings, internal doors and handles, tiles, flooring etc. Loads of jobs can be done cheap and revisited in a few years 

Do out a spreadsheet of the list of jobs that need done and how much you have left out of the budget to do these tasks.

I would also be asking how he was so much out on the costings for the garage. What has caused this near double in price difference??

It doesn't really matter if your husband doesn't want to hear it but you are going to have to explain it to him and both of you pull together to get the house finished. 

A simple look listen the build costs are starting to spiral but I reckon if we use the costings in this spreadsheet and make a few sacrifices on a few things I still believe we can do it. Don't be all doom and gloom. 

 

[Ferdinand]

Sorry to hear that.

 

At this point you need to find out where you are (ie evidence as to whether your fear is in reality justified, and to what degree are you howling at the moon on the basis of things you do not really know), and you need to identify potential savings amongst costs which are not sunk (sunk costs are things you cannot affect as they are already committed, though sometimes you can agree eg to a contract variation once and only once you know what you need to do). Sunk costs are spilt milk.

 

Bit you need to work on a detailed level.

 

If you are at second fix stage, then there is a lot you can still do - as finishes and furniture are where we spend a lot of our cash.

 

And there are a lot of things for which you can get less expensive alternatives with a plan to replace in a few years or a decade eg laminate worktop not granite, 1.2k range cooker or £250 5 burner hob, not 5k range cooker etc.

 

There will also be some things you *can* do eg painting the first coats or gardening, sweeping up or humping (metaphorically) bricks. Find them.

 

This thread by @Visti is a fairly thorough 'reducing the budget' exercise, in search of something like iirc a 30% reduction. There are a huge number of good ideas.

 

I think you also need to address this with the other half - you will both need a prop to lean on if you are making serious changes or hard decisions.

 

What did Churchill say? "Action this Day", and then built his own brickwork.

 

Best of luck,

 

Ferdinand

 

 

 

 

Edited September 2, 2018 by Ferdinand

[Jude1234]

Thanks for the advice, I will take a look at the link Ferdinand.  I think part of the problem is that I am not in control of everything and I am a control freak.  I will discuss with hubby tonight and take a look at how we can compromise on some things.  I think that some of the bamboo floor may be going back......

[lizzie]

47 minutes ago, Jude1234 said:

Our house is being built by a main contractor who provided one of those HBXL estimates at the beginning of the project.  It was very clear what was included and excluded.  However now that we are 3/4 of the way through and I asked him for an update on the situation on the build vs the estimates and we are way over.  Firstly it said on the front sheet that in the estimate they had allowed approx £17,000 for sanitary ware.  I had sourced these on the internet for about £7000 so I felt good that I had 'saved' £10,000 from the budget.  Then they said the garage would cost about £10,000, now they are saying it will cost £18,000, of which we have already paid about half, so no turning back we are committed to having a big garage.  We have also committed to all the bathroom and kitchen items (all bought and in case of the kitchen fitted).  Because we are both absolutely useless at anything in the house we are reliant on trades to finish off, there is nothing that we would feel comfortable doing ourselves, not even the painting as we don't want to ruin it.  I am trying to think of ways to reduce costs but really struggling.  If we delay some stuff then we will be in our rental for longer (which is driving us mad) and we will still need to pay for stuff eventually.  |I am kicking myself that I have not kept a closer eye on costs earlier on and asked how much everything was going to cost before I agreed to it.  For example we chose lovely brushed chrome sockets, light switches etc but have no idea the cost.  The electrician went ahead and ordered them and now they can't be returned (I did ask if we could change to cheaper plastic ones upstairs for instance).

 

I feel so responsible for getting us in to this mess as it was me that wanted to self build, my husband would have been happier to buy something that would have been cheaper.  He has left all of the planning etc to me as he is so busy and stressed at work.  I don't feel I can talk to him about it and get him more stressed.

I so know how you feel.  I had the same although we did not use a main contractor but a project manager and trades. PM was in charge of budgets.  Costs spiralled out of control and by the time we realised we were too far in to stop a lot of it........I say we I kept it to myself too, nearly caused me a breakdown by the time I eventually did come clean to OH situation was even worse. he was an absolute angel about it all, didn't change the horror of it but at least he didn't blame me. We got there in the end massively over budget and not all from over spending on items a huge amount was waste and mistakes and doing things over again....I didn't know most of what was going on.......like you we are useless at practical things and health does not permit either.  He never wanted to build the house it was all me.  Its a very hard lesson and I came out of it feeling broken by the experience. No one to blame but me.  If you are at a stage you can pull back on some things then look closely, I was afraid of PM due to my ignorance, don't be afraid to confront your builder, I should have done it...and sacked him.  Take back control you will feel better for it lots of helpful people to support you here.  Good luck.

[Jude1234]

Thanks Lizzie I know that husband will be okay with it but he has this hate of debt and so wants to keep the mortgage as low as possible.  As well as the house we have had lots of other bills come in (son starting senior school so uniform shoes new glasses as his prescription had changed, car bill etc) so it is just a bit overwhelming 

[newhome]

Really sorry to hear this but it must be a relief to start discussing the issue with someone even if only on here for now. Hopefully the support you will get here will help you to put everything into perspective and understand how you can tackle the issue going forward. Then when you have everything straight in your head you can sit down with the hubby, explain the problem clearly and have some idea how you can move forward and take back some control. Some good advice above and I can't add much to it other than to say that I think the majority of self builders go through a budget wobble (or 2!) sometime during the build and have to take action to address so you are not alone by any means so don't go beating yourself up over it. The good thing is that you are tackling this before you get in any deeper. As others have said look for areas where you can economise and use this forum to seek advice on where to obtain the best prices for x and y. There are plenty of people on here with experience who will be able to advise how you can cut costs in specific areas without ending up with something not fit for purpose. 

 

Also don't rule out scanning the selling sites on Facebook, Gumtree or eBay for materials. You won't be able to claim the VAT back unless they are a VAT registered seller of course but if people have items left over from a project for example it can be much cheaper to source them that way anyway. 

 

The most important thing is to try to stay positive and to do what you need to take back control. You will feel much better having done so and it won't help anyone at all if you keep things to yourself and remain stressed to death. Keep talking, it helps x 

 

 

[Hecateh]

And me too.

Different budget same scale.  I'm doing it all alone though , so no one to blame and no one share.  From believing budget covered everything except things down to personal taste to discover it didn't - basically just the shell.  And my budget was small and to be paid for from the sale of this house with the left over to cover retirement.  Already retired but no pension to speak of for another 3 years (when it all went *&*( up.  

Builder wanted another 46k just to finish and that didn't include any personal choice fittings at all.  That money just did not exist.  I felt constantly for a month - which was the time it took to get the absolute walls finished and roof on and then sacked him.  

I've cut back all over the place, taken on the project management, with plenty of support from here.  (Practical and emotional).  And it's going to come in at about the cost he said - but now to include the windows, doors, kitchen, bathrooms, electrical fittings and flooring.  

 

I will have less than half what I had planned for for my retirement and I have regretted starting so many times BUT for all I am regretting it now, I do know that, in the long run, I would have regretted it more if I hadn't done it.  My finished house may be small and certainly won't be high end but it will be plenty big enough for me, with much lower energy bills and very low maintenance .

 

I'd also echo @newhome keep talking.  We can be our own biggest critics but it won't undo what is done.  You aren't the first and you certainly won't be the last. 

[ToughButterCup]

Join the queue, Jude, join the long line. It's so long in fact I can't see you way down there at the back.

 

2 hours ago, Jude1234 said:

[...]

  I am trying to think of ways to reduce costs but really struggling.

[...]

 

Let's keep it simple.

 

Turn the guilt into determined useful behaviour ;  that was then, now is now. Forgive yourself.  Move on.

 

Take cost control into your hands. That means hard work on both your your parts; OH and you.

 

Break the job down into chunks that are meaningful to you. Get a price for those. Make sure the price is agreed. Take notes, and share them with the trades person. Do not allow the trades to  ' .... It'll be Ok, I'll get you a better price for that ... ' find out how much before mandating  the work.

 

You hate your rental . Move. Caravan? You won't be the first or last to do that.

 

Communication;  Very brave of you to be that honest and open. It's not an option to load one party with appropriate levels of responsibility.  Being over-stressed at work is normal. Face it, own it, do something about it. Take control.

 

Keep coming back to us all.

Ian

 

 

 

 

 

 

[Jeremy Harris]

Just to add that you're very far from being alone - going unexpectedly over-budget seems to be something that hits a lot of self-builders, even some of the most prepared.  In our case we managed to afford to get the house built so it was secure, we weren't prepared to cut corners on what we wanted (this is planned to be our last ever home), so I ended up doing far more work myself than originally planned and we still ran out of money.  I've spent the last two years only doing work when I've been able to save some money from my pension, so it's been very slow going, and that delay has cost us a lot of money in interest payments, council tax on two houses, etc.

 

All I can say is that you will get over this, and with luck you will get the house you want.

 

As a final point, I would like to add that I think that some of the TV shows about self-build have a lot to answer for, in that they often seem to play down the true cost, and make self-build look like a more affordable option than it often is.  My personal view is that they rarely, if ever, give the true cost of most of the builds they show, and that may well mislead a lot of people.

[Stones]

@Jude1234  Can't really add much more than has been said already, but the main thing is you have identified the issue and at least can do something about it.  Conversation with your OH is essential and not to be delayed.

[ultramods]

I think before doing anything else you need to look at the contract you have with the main contractor. Can you explain to us why you have to pay the additional 9k for the garage?

 

Has he simply bid really low for the work so he would win it, but is now going to hit you with additional costs for every aspect for the build?

 

from my perspective to only unknowns in a build should really be the groundwork’s unless extensive surveys have been carried out before hand. For example on my build the builder gave costs for 3 courses of under build for the foundations but said any additional courses would be additional which was fair enough. Likewise he didn’t know exactly how much excavated earth would need to be transported off site so gave us a cost per m3, which again I was happy with. However once you are out of the ground I really fail to see how trades can’t estimate costs precisely if they are building a fairly standard design house with standard materials that they have experience building with. 

 

In in terms of saving costs, we are saving 7-8k by getting our kitchen units and worktop from DIY-Kitchens instead of one of the high street kitchen retailers. All appliances will be bought from eBay (have set up alerts on eBay when specific appliances appear). 

[HerbJ]

All the above is good advice,  particularly 

34 minutes ago, ultramods said:

I think before doing anything else you need to look at the contract you have with the main contractor.

 

The one thing that is not clear to me is whether you have a clear account of your total costs to date?  How have you been paying the main contractor for work completed to date - has he recovered more than the cost work completed to date - was the payment  method agreed based on a positive or negative cash flow basis to the main contractor,? Was it based on a % measured completion or on stage payments against agreed physically completed elements

 

Your main contractor should  now be required to detail the actual costs to date by each build element in your estimate.  From this data, you should be able to look at fully completed elements - for example, foundations.. You can build then a detailed estimate of costs to go for each element - for foundations if 100% complete, cost to go is zero - and this will give you;

1. A much more accurate estimate of final cost- you are now only dealing with cost to go.
2. A much better idea of which elements you can influence by  reducing quality, eliminating or postponing - you can no longer costs on anything finished or close to completion - you can no longer costs on anything finished or close to completion
3. A basis for having a detailed discussion with your main contractor,- element by element -  what work has  to be completed on each element and when, cost estimate to complete and also the reasons for any overun on both completed and incomplete elements, so 

   34 minutes ago, ultramods said:

   Can you explain to us why you have to pay the additional 9k for e garage?

    

Edited September 2, 2018 by HerbJ

[Visti]

Since we did the cost exercise we've been much more comfortable in making decisions on how money is spent. We know when we're going over our budgeted amount and by how much. Every grand we overspend we've got to either accept as an increase in total cost or rake it back by reducing some other line item. It's really helped keep perspective and makes managing the funds much easier.

 

We also go with the fabric first approach, whereby we prioritise costs going into the fabric of the house where they'll last 50+ yrs (we hope), rather than items which can be easily replaced down the line such as kitchens, bathrooms, joinery and landscaping. This is very much in line with our plan for this to be a forever home, however your priorities my be different.

 

Regarding the contractor; be on top of them and get those details for why costs are spiralling. Communicate the limits of your budget and the consequences for going over. Refer to contractual items if need be. If they provided a fixed price, then they accepted the risk of material and labour costs. If not, then unfortunately the risk is yours to bear. Get a dialogue going and try to identify where you can cut costs or what parts of the project can be de-scoped with the contractor. 

 

Worst comes to worst, try to get the project to a place whereby it can be neatly paused as you re-evaluate the financial situation and what it'd take to finish the project. That should hopefully give you the breathing-room to think clearly.

[Jude1234]

I have to own up that we do not have a contract - I know big mistake.  He provided this estimate and then we have been paying him monthly in arrears for the work that has been done.  But it isn't a detailed invoice, very top line. When I did try to get to the bottom of what I had paid for and what was outstanding that is when he had to admit that the estimate was wrong for the sanitary ware and the additional cost for the garage.  His only excuse for the garage was that it was bigger than they thought when they estimated.  I suppose that if I didn't sign a contract then I can stop them at any point.  A bit of a scary thought but perhaps just the mention of that may make them take me more seriously and be more open about the costings

[ultramods]

7 minutes ago, Jude1234 said:

I have to own up that we do not have a contract - I know big mistake.  He provided this estimate and then we have been paying him monthly in arrears for the work that has been done.  But it isn't a detailed invoice, very top line. When I did try to get to the bottom of what I had paid for and what was outstanding that is when he had to admit that the estimate was wrong for the sanitary ware and the additional cost for the garage.  His only excuse for the garage was that it was bigger than they thought when they estimated.  I suppose that if I didn't sign a contract then I can stop them at any point.  A bit of a scary thought but perhaps just the mention of that may make them take me more seriously and be more open about the costings

How can the estimate for the sanitary ware be wrong? If he said 17k and you bought all the sanitary ware for 10k?

 

Is the 17k simply the cost for purchasing the sanitary ware or does this cost include first, second and final fix for all your bathrooms?

[Jude1234]

At the beginning of the estimate it said that included in the estimate was £17,000 for sanitary ware, but in reality the figure included was £1,700.  So I have paid about £5300 more than was in the estimate, but I didn't realise that, I thought I was actually £10,000 under budget.

[Stones]

@Jude1234 I've built 6 houses now, 3 with written contracts, 3 without.  It's not necessarily a mistake not having contract, and you are where you are, so don't beat yourself up over it.  

 

As above, getting the provisional price for sanitary ware wrong seems odd unless it included the cost of doing the work in addition to purchasing the actual sanitary ware.  When we priced for our current house, our builder included a provisional sum for flooring but I had to clarify whether this was labour and materials or for materials only.  Are there other provisional sums relating to works still to be completed where there may be scope for confusion on one side or the other?

 

Assuming your builder explains to your satisfaction why your garage is costing so much more, and you are able to clarify any provisional costs as above, I would be asking 'for his help' in identify savings for you to consider.  

 

 

[Stones]

24 minutes ago, Jude1234 said:

At the beginning of the estimate it said that included in the estimate was £17,000 for sanitary ware, but in reality the figure included was £1,700.  So I have paid about £5300 more than was in the estimate, but I didn't realise that, I thought I was actually £10,000 under budget.

 

In reality is this a very unfortunate typo on the estimate or do you think it was intentional?

[Jude1234]

2 minutes ago, Stones said:

 

In reality is this a very unfortunate typo on the estimate or do you think it was intentional?

I honestly think it was a typo, but just one that led me to spending more on the sanitary ware than I would have if I had known that it was £1700 in the budget.

[Jude1234]

We are at the 2nd fix stage so there is less scope to reign costs in.  Have talked to OH and agreed to look at everything to see where we can cut costs without compromising too much on the level of finish.  We have already decided only oak doors downstairs, the bamboo flooring in the main open plan area, with carpet in the other separate rooms.  A good quality carpet on the stairs but then cheaper carpet in the bedrooms.Only shower panels in our ensuite as this is the one that will get used the most. Only part tiling of the bathroom/cloaks etc rather than full tiling.Not sure what to do about fitted wardrobes yet, but will need to compromise on these.  Most other things are already bought and just need fitting.

 

I really appreciate all of your comments, it is great to think that I am not the only one that has been through this.  I am feeling a lot more positive and will hopefully have a useful discussion with our builder tomorrow.

[newhome]

Have a look on eBay and see if you can get some fitted wardrobes locally. They are the sort of items that don't go for much as people don't want to collect large items generally so you may get a bargain even if it's something temporary until you can afford what you really want. 

[Onoff]

Gumtree and Preloved are two sites I've had some cracking bargains off of. There's a small fee to pay on Preloved but well worth it. 

[ProDave]

I am another that had no written contract with my builder, just an estimate, and an open ended contract ("carry on until I say stop")

 

This worked probably because I knew and trusted the builder. I was kept informed as they progressed how the bill was mounting up and I paid instalments due on time.

 

When it became apparent my old house was not going to sell quick we moved onto "plan b" and took over the build ourselves. By this point we had a wind and watertight shell and I have been doing the rest myself. Taking much longer, but it enables me to keep a lid on spending and only spend at the rate we can afford.

 

Because I had a good relationship with the builder, was honest with them from the start about finances, and kept them informed, then when the time came to part, that parting was amicable to the point I know when I am ready to get them to do some more work, they will do so.

[Ferdinand]

7 hours ago, Jude1234 said:

I have to own up that we do not have a contract - I know big mistake.  He provided this estimate and then we have been paying him monthly in arrears for the work that has been done.  But it isn't a detailed invoice, very top line. When I did try to get to the bottom of what I had paid for and what was outstanding that is when he had to admit that the estimate was wrong for the sanitary ware and the additional cost for the garage.  His only excuse for the garage was that it was bigger than they thought when they estimated.  I suppose that if I didn't sign a contract then I can stop them at any point.  A bit of a scary thought but perhaps just the mention of that may make them take me more seriously and be more open about the costings

 

If you do not have a written contract that makes it more difficult to enforce specifics because there aren’t any.

 

Which makes it easier for you to change things should you need ?.

 

In practice some sort of custom and practise will have developed within your relationship. But you can change that and assert yourself.

 

I think you first of all need to spend some time .. perhaps up to 20 or 25 hours for starters ..working out exactly where you are, what you have spent, how that relates to what you thought you were spending, what you have left, and how you want to deploy it.

 

You need then to find out how you will bridge any gaps .. whether putting more in, or finding ways to make the needed amounts smaller, or delaying expenditure.

 

If you look at the thread I linked there were dramatic reductions in a number of areas, and there are various things that iirc were simply excluded.

 

Several people have posted their similar exercises or costing spreadsheets if you did around on the forum.

 

Ideally I think you want to stop work, or at least not start new work elements, whilst you do this .. to create a static starting point and to mark a watershed in your methods.

 

Ferdinand

 

 

Edited September 3, 2018 by Ferdinand