Building Finance
With rapidly spiralling house prices forcing more people to stick with their current property for the time being, several homeowners are choosing to extend their existing property in order to gain extra space without having to sell up. Although the cost of building an extension can be significant, it is a sure-fire way to add value to your home and will serve those looking to move away in a few years’ time just as well as those who are setting up for the long haul.
As with any major project, there are a lot of factors that need to be carefully considered before any work on an extension can be undertaken. From initial designs to planning applications, supplies to labour costs, each stage of the process has the potential to cause major disruptions to the project if it is not thought through beforehand.
House Extension Cost Assumption
Firstly, we are assuming that your project is a house extension, i.e. you will be adding something to the house which will ultimately increase the size and envelope of your house. We are assuming that you are at the planning stage of the project, with no plans created, designs started, and no permissions applied for.
The last assumption is that you are doing this project for your own home to live in, and this is not a project or development you are completing to make a profit. I.e. this is not for a property development business or to supplement your income. The final point is important, as there are distinct differences between renovating your home for you and renovating a home to make money, but that is another topic for another day…
What and Who Needs to be Budgeted For?
At this early stage of planning and budgeting for a project, we need to list out everything which we may need to spend money on.
A lot of people get this stage wrong and end up having to spend a lot more money than they first thought. So, let’s start your project with a good and clear budget. This is also critical at this stage should you be budgeting for a loan to pay for the house extension costs as you need to know how much money is needed. The simple question of what needs to be budgeted for you house extension cost should be broken down into several categories:
- Design Team
- Surveys
- Permissions and Legal Requirements
- Construction Costs
- Fixtures and Fittings
- Contingency
This list can be quite long, but there are a lot of potential costs involved, and different areas where costs appear.
Now let’s look at each section and add some more meat to the bone. As a note, I will not be giving you any definitive costs to each section, as the cost will vary greatly from project to project. What we are doing here is generating a full and complete list of all the potential cost items which you need to consider and budget for you for your house extension cost.
Construction Costs
Now to the meat of the house extension cost.
Obviously, this is the money which you will be paying to the builders for them to complete the construction phase of your house extension. This will be the biggest cost within your budget, and it is essential that you do some research and allocate a proper and estimated budget for this.
- Speak to a Professional – Pay a professional to review the project for you. Whether this is a Quantity Surveyor, Builder, Building Surveyor, Your Accountant or Project Manager, it doesn’t really matter. The point is that you are paying someone for their expert advice and recommendations for your project. This approach would be more suited to larger and more complicated projects, especially when there are more design team members involved.
- Speak to an Architect – Architects work very closely will builders and at any one time, will have several projects in the construction phase. They will know from experience and from talking to you about your project, the approximate costs to complete the house extension, within a range.
- Quote from Builders – The first step to get a good estimate of your construction cost is to go to a builder and ask them to quote for the project. Make contact with them, explain your project and invite them round to visit your home. Once they are there, you can go through all the detail of the project and ask them to come back to you with a quote for the works.
Creating and planning a project at the early stages can, in some instances, make or break a project. One of the key areas which always causes some issues is the house extension cost and budgets.
Ensuring a good and well thought out budget is created at the beginning of the project, will ensure that you remain in complete control of the financial side of things. This is an area that can escalate very quickly, and when money is involved, this can lead to a disastrous situation.