Feel sick with worry about escalating build costs

[Visti]

Not having a written contract is also a positive given your current position... you can negotiate changes to the scope/quality of the work and you could even stop works at any time and settle up with your contractor nearly immediately. Though I suggest you negotiate an exit strategy for both of you so you don't part on bad terms.

 

Don't forget a verbal contract is still considered legal, just very hard to prove.

Edited September 3, 2018 by Visti
Typo

[AliG]

I'm sure you have everyone's sympathy Jude.

 

It seems from a lot of the replies that in many cases a self build is very much one person in a couple's project. In my case it was mine and I know that my wife has fund it a lot more stressful than I have. You may as well get it over and done with telling your husband, painful as it might be.

 

I don't think the contract makes much difference, I never actually signed off on a contract with the builder. I had an estimate like you but builders aren't quantity surveyors and often just don't have enough information to make accurate estimates. They are also notoriously optimistic. Then of course you only know about the rising cost once it is too late.

 

It isn't really clear how much you are committed to in the build, it sounds like you are pretty far gone. In a way that might be good in that at least costs shouldn't be able to rise much more.

 

I looked back at some of your earlier posts re oak stairs and PV, these wold clearly be places that money could be saved. However, if the issue is simply keeping the mortgage smaller, the return on PV is likely larger than the interest on the mortgage to pay for it.

 

Two suggestions I would make for saving money - 

 

1. Have you just specced things like he bamboo floor, door handles etc and left the builder to source them. Builders want fast access to things and credit to pay for things so generally just order it from their normal builders merchant. Often you could cut costs if you know what materials are needed and you source them yourself. So if any expensive materials still need to be ordered get quotes from the builder and see if you can beat them.

 

BTW if that £18,000 includes an expensive electric sectional door, Costco are doing insulated sectional doors up to 5m width fitted with electric opener for £1995.

 

2. If money is really tight, you say that you don't have much capability at DIY, but anyone can paint. Indeed, looking at the job done by the first painters we had, anyone can paint better than many painters! Professionals often get things done a lot faster, but with less attention to detail. You also mentioned having teenage sons. Get them some rollers and get painting! If you paint before floors are down then it doesn't matter too much if they make a mess.

 

One thing I would have a serious look at is landscaping costs. There wasn't much in our quote for these as they hadn't really been specified when we started. Driveways, retaining walls in the garden etc can be very expensive, but they can also be done cheaply and improved later.

 

I think in one post you did mention keeping the mortgage to around £100k and that was 20% of the cost of the build. I don't know if this is still the case. I am in your husband's camp of keeping debt as low as possible, but increasing your mortgage for example from £100k to £125k increases the monthly payment from around £475 a month to £600. Maybe that puts it into perspective.

Edited September 3, 2018 by AliG

[jack]

1 hour ago, AliG said:

You also mentioned having teenage sons. Get them some rollers and get painting! If you paint before floors are down then it doesn't matter too much if they make a mess.

 

Plus by the time they've done the mist coat, they'll have loads of experience, and the top coat will look great!

 

As others have said, virtually everyone who goes through this process has at least a couple of pain points where things feel like they're out of control and the problems insurmountable. It's rarely as serious as that with the benefit of hindsight, but it doesn't make the feeling any less real right now.

 

I'd encourage you to speak with your other half ASAP. A large part of your stress seems to be to do with what his reaction might be. Get that reaction, whatever it might be, out of the way, so you can save your energy for addressing the real issue, which is where you've gotten to with the house.

 

If you want help with identifying specific areas where you might save some funds, do post more details. There are plenty of bargain-hunters and serial self-builders who'll be able to point to cheaper ways of doing all sorts of things.

 

[newhome]

I didn’t do too much practical work during my build apart from holding things like doors while they were fitted and helping lay the UFH pipes etc but I did the majority of the painting and varnishing. I had a ‘professional’ painter in to paint the extension but I wish I hadn’t as I don’t think it was done as carefully as mine as @AliG notes. If I can do it then anyone can and you’ll save some money and get some satisfaction from doing it I’m sure, especially if you view it as a couple of grand off the mortgage. 

[AliMcLeod]

I'd be tempted to treat today as day 1 of your build, with an existing part-built structure in place. Get your builder to give you a price to complete what needs to be completed, taking into account the advice you've received above with regards to where you can perhaps reduce the spec initially. 

 

With the build at the level of completion you've stated, I'd hope your builder should be able to give a much more accurate estimate for the remaining work. I'd even consider asking them to complete for a fixed price, but you'd have to detail everything that is included in that.

 

Then compare the figure you get with your financial position and determine a way forward.

 

Oh, and keep asking here - there will be very little, if anything, that someone here has not been through before.

 

Good luck

 

[MikeSharp01]

3 hours ago, AliG said:

around £475 a month to £600

Interest only / over how long?

[MikeSharp01]

Even when you are doing the bulk of it yourselves cost control is very hard / almost impossible. So far we have been hit with (to list the main ones):

 

Asbestos removal.

Additional site insurance as we ran out of time.

Muck away costs we had not planned for, we had to dig deeper than we expected.

Additional type 1 for the sub base going to 150mm from 100mm.

Additional Concrete in the slab as we have 150mm thickness not the normal 100mm (Will be good for energy storage but costs a lot)

Failed polish on the concrete - so we have to grind it.

The £ going south.

Some additional labour to help me when I could not do it alone.

 

All of which has eaten well into our contingency, and we are only just out of the ground, so we are now looking at a whole re-budget exercise. It is only us so no 3rd party to blame either.

 

Keep on keeping on, not a lot of choice, and it will be worth it in the end is the way I see it - pragmatism can suppress panic sometimes.

[Jeremy Harris]

I can second @MikeSharp01s comments above.  When planning our build I focussed very much on getting out of the ground, for two reasons; all the TV shows make the point repeatedly that that's where the greatest risk is in terms of unforeseen costs, and because we had a challenging plot that we already knew needed a heck of a lot of ground works (around £50k worth - and it's only a small plot).

 

Fortunately all our ground works (with the exception of a long saga with our water borehole, which cost us a close to year in delays, but didn't end up costing us too much more money) went well. which lulled me into a bit of a false sense of security.  Our frame went up quickly, with no snags, but it was around then that I realised that my large and, so I thought, comprehensive costing spreadsheet had missed out some items completely and seriously underestimated others (I underestimated the roofing cost, missed out things like skip and general site rubbish clearance cost, underestimated a lot of the internal fitting out costs and seriously underestimated the costs for landscaping and installing a SuDS compliant surface water drainage scheme).

 

We ended up having to borrow another £50k over our planned budget, and even managed to blow that, hence the major slow down as I saved from my pension each month to buy materials to get work done on a piecemeal basis.  Thankfully we will end up mortgage-free now our old house is almost sold, plus we'll be able to top our savings back up to pretty much the level they were at before we started the build.  We've also just about ended up with a house that is worth a bit more than it cost us, but not by a lot.  This latter point is one reason that I'm a bit sceptical of some of the TV shows that seem to show very cheap self-builds, without the owners having done a lot of the work themselves.  I did a lot of work on our build, all the plumbing, kitchen fitting, most of the flooring, all the internal joinery (except hanging the doors), installing the ventilation system and heating and cooling systems, both bathrooms, the utility room and downstairs WC, and it still cost more than we'd budgeted for.

[newhome]

Not wanting to add to the list of things you need to go through just now but it is something that you need to look in detail at soon if you haven’t already. You need to double check the VAT position to ensure that you haven’t been overcharged for VAT anywhere although it appears that you are doing most of it on a supply and fit basis that should all be zero rated as long as they are eligible items so that will be a positive and should be a straightforward check. For things you have bought yourself and need to reclaim the VAT, double check the invoices are all in order so that you can go back and address any anomalies now rather than when you are about to send your claim. Full details in this post. 

 

 

 

[AliG]

5 hours ago, MikeSharp01 said:

Interest only / over how long?

 

Those figures were a 25 year repayment at 3%, I just plugged those numbers in to get a

rough idea.

[worldwidewebs]

Fitted wardrobes? Go to IKEA. You can build these yourself!

[Jude1234]

Thank you so much for all of your messages of support.  I have discussed with OH and he has been very supportive.  He knew that, in his words, we would be skint by the end of the build.  I did speak to my builder today about concerns for costs but he was still a bit vague.  So I am going to do as advised and write a list of all the jobs that I think are still left to do and get him to estimate how much each will cost, and get him to split between labour and goods.  I am going to ask him to not buy anything else unless I have agreed to it.  This week the only work that is being done is the joiner fixing skirting and doors so that can carry on as all of that is purchased and would need to be fitted anyway.  Does that sound like a reasonable approach?

 

When I have had the chance I have tried to source goods myself on the internet and have got some bargains.  I bought the kitchen from DIYKitchens and sourced all of the sanitary ware from online merchants.  I just wish that I had done more of this, but lots of stuff has already been bought.  OH and I have agreed on some reductions but we do need to look at all costs going forward.

 

Thanks again for all of your support, it is good to know that I am not alone.  When I have the detailed costings I will share to see if there are any ideas on how to reduce costs.

[Jude1234]

4 hours ago, newhome said:

Not wanting to add to the list of things you need to go through just now but it is something that you need to look in detail at soon if you haven’t already. You need to double check the VAT position to ensure that you haven’t been overcharged for VAT anywhere although it appears that you are doing most of it on a supply and fit basis that should all be zero rated as long as they are eligible items so that will be a positive and should be a straightforward check. For things you have bought yourself and need to reclaim the VAT, double check the invoices are all in order so that you can go back and address any anomalies now rather than when you are about to send your claim. Full details in this post. 

 

 

 

Thanks @newhome I had a read of that at the weekend.  All of the invoices have been zero rated from the main contractor and I have kept all of the other ones in a file ready for claiming back when completed.  But I will check that they are all in order, don't want to miss out.

[Declan52]

It's the first step going forward. Take control of the build and just be straight and honest with the builder that this is how is going to be. He won't mind.

Get a list done out of all of what you have already bought and be really thorough as you don't want to buy something you already have and do your costings and see how you stand with the remaining budget. 

 

[newhome]

2 minutes ago, Jude1234 said:

But I will check that they are all in order, don't want to miss out.

 

Specifically check that they all say 'invoice' and show your name, supplier name, VAT number. All should be good hopefully if they meet that criteria. 

 

Good news that you are getting things together now, and yes it will be down to you to drive this now and ensure that the builder knows that you are in the driving seat. Sounds like you are ready to make this happen. 

 

[Jude1234]

My buildier is being quite evasive when I have asked him for estimates for specific tasks of the build that are left. They say that contractors will add in a contingency when giving quotes so I won't getthe cheapest price - is that correct? 

 

Also what is an approx daily rate for a tiler? And is it correct that the majority of the cost of scaffolding is in the erection and dismantling? 

 

As you see it is not being straightforwardgetting any figures out of him unfortunately.

[newhome]

Have you not paid for the scaffolding? Erection / dismantling should be about a third to a half of the cost. The rest hire. 

 

Contractors may add on what’s called a risk premium for a fixed price job as this mitigates against them being out of pocket if things go awry. As the work should be very clear at this late stage this shouldn’t be much at all. It may have been higher at the start of the job with more unknowns. Go back and tell him that a risk premium isn’t appropriate so near to the end and to go ahead and provide the fixed price quotes as what’s left should be very easy for experienced trades to estimate for. 

[PeterW]

I would check with him what is needed to finish the garage and then ask him to stop. 

 

I would then take the rest of the build “in house” and hire the subcontractors directly, asking for either day rates or a firm price from each to complete. 

 

On  the scaffolding, approx 2/3rds is on the erection and dismantling and 1/3rd on the hire however if you have it over 8 weeks a number of companies then add a premium by the week. How long has it been up..??

 

And tiler day rate around you should be £180-240 for a good one. 

[newhome]

29 minutes ago, PeterW said:

On  the scaffolding, approx 2/3rds is on the erection and dismantling and 1/3rd on the hire however if you have it over 8 weeks a number of companies then add a premium by the week. How long has it been up..??

 

Is it two thirds? @vivienz got it split 50 / 50 and @nod said two thirds hire here. The only reason I query it is because I’ve used the approx figure in the vat guide so would like it to be right. 

 

https://forum.buildhub.org.uk/topic/6882-vat-and-scaffolding/?do=findComment&comment=116723

 

 

[recoveringbuilder]

Sorry to but in but I’ve always found taking on trades at a daily rate is not recommended, after having to sack our joiners on our last house we took new ones on on a daily rate and as we couldn’t be there all the time things seemed to take an awful long time until we said we couldn’t keep paying that way we’d need a price to finish the job, after that they went at a rate of noughts!

[newhome]

34 minutes ago, PeterW said:

And tiler day rate around you should be £180-240 for a good one. 

 

Think I read that it is about 30m2 for piece rates. @nod? 

[PeterW]

4 minutes ago, Christine Walker said:

Sorry to but in but I’ve always found taking on trades at a daily rate is not recommended, after having to sack our joiners on our last house we took new ones on on a daily rate and as we couldn’t be there all the time things seemed to take an awful long time until we said we couldn’t keep paying that way we’d need a price to finish the job, after that they went at a rate of noughts!

 

So that’s the difference in a priced day vs just having them turn up - and depends on duration too. 

 

I would say say to a joiner that has 12 oak finish doors to hang that I’m expecting 3 per day, so 4 days in total. Get them to agree that’s reasonable and go from there. After 2 days, if only 3 doors are hung it would be a quick conversation or goodnight Irene.

 

The issues do come though with situations where they are following on from other trades and potentially picking up other work that may not have been done right.... and that’s not a good place for anyone to start ..!!

[Jude1234]

It is very specific work that needs to be completed now, 2nd fix, tiling, laying of flooring (when the screed is dry!) so estimates I thought would be quite easy to produce.  I have even said that the trades are allowed to say 'that isn't in the quote  so will be x more if you want me to do that'.  I just want transparency and to feel in control of the costs, which I am not at the moment.  There are some more difficult task, such as the steel canopy(?? architect design) that I realise could cost more, but I have said that we can move in without that and look at it later.

[newhome]

I’ve been ripped off both with day rates and fixed price rates. The benefit of fixed price is that it (should!) create certainty and you have the back up of experienced guys here to help validate the quotes. 

[Ferdinand]

1 hour ago, PeterW said:

firm price from each to complete.

 

@Jude1234 , to add,that is a specific term.

 

"Firm price" means unchangeable.

"Fixed price" mean can be changed in certain circumstances.

 

So clearly the "firm price" transfers risk to the supplier, who will therefore add an appropriate premium for the extra risk you are asking them to take.

 

@JSHarris summarised it well on another thread:

 

Quote

.  Firm price contracts are fixed in price, fixed price contracts are not fixed in price - variation is allowed for some things, like exchange rates pushing material costs up.  Quotes are very often treated as an estimated price, neither a firm or fixed price and a quotation should be a firm price but very rarely is in practice.  This last point is where I think a lot of people come unstuck, they believe a quotation is the actual price they will pay at the end, and often it isn't.

 

The full thread is here:

 

Ferdinand

 

Edited September 5, 2018 by Ferdinand