Construction costs have been falling steadily over the last 3 years. Much of this is due to “The Credit Crunch” but generally, in simple economic terms, as the demand drops for house and commercial building work, prices fall to attract new customers. Demand and prices are forecast to drop a further 3 – 5% in the next 12 months (from October 2010).
Estimates for Building Work
Building work (alterations, extensions, refurbishment, renovation etc) is priced by professional quantity surveyors in a way which reflects the degree of difficulty and cost effectiveness of each operation.
The method they use is called (since August 2010) the New Rules of Measurement (NRM) which replaced a method called the Standard Method of Measurement which had been used for many years previously. The Royal Institute of Chartered Surveyors (RICS) have adopted the NRM and any surveyor measuring the work either done, or to be done, on a building of any kind, will use the NRM to measure by.
The NRM takes into account the variation in cost of large jobs as opposed to small jobs.
An example of this might be: If a plasterer is called to plaster a wall which has a patio door and window in it, it will take much longer than the same wall if it were blank.
The amount of plaster he uses will be roughly the same because of the reveals (sides and top) of the window and door. Even if it were less, he could not buy half a bag of plaster so he would have to charge for a full bag anyway.
The labour time will be considerably more expensive because of the “fiddly” nature of the work.
All this means that, to measure and price a job properly, various factors have to be taken into consideration. It is therefore not possible to price a job accurately simply by working out the size of the wall, house, extension, conservatory etc.
How to Price Building Work
DIY Doctor (in conjunction with surveyors and software engineers) have developed a scheme which will accurately reflect the cost of every single home owner project starting firstly with an extension. We have now also now released our own Desired Outcome Contract which can be used by Home Owners and Builders for domestic contracts up to £75,000. This contract is FREE and is available from our page on building contracts.
Price and Quote Checking Software
From laying a path to building a house, you will soon be able to click a few buttons on our website to be able to know in advance of any quotes, how much your building work should cost. This project has taken us 5 years to put together and is available here.
The Basics of Pricing Building Work
Within this project page we have also included some very basic pricing method you may use to check quotes you receive from tradesmen or even use to build your own extension etc.
As mentioned above however, these prices do not necessarily reflect the difficulty of the operations involved in the build and they all assume an easy approach to the job. Prices used on this page can vary as much as 60% for particularly difficult or unusual jobs.
It is for this reason we suggest you NEVER accept a quotation price from a builder or tradesman unless he has explained to you in his quote the various procedures he intends to go through to complete your job.
Unless you work in a builder’s merchants or large DIY Shed, the builder should ALWAYS be able to get materials at a better price than you. This is because he should get “Trade” discount and the more he spends with any particular merchant, the more discount he should get.
The quality of a builder or tradesman can be measured by the amount of work (and consequently, the turnover) he gets. The more work he gets, the more materials he will need to buy. The more materials he buys the more discount he commands. Good builders get as much as 40% discount on the building materials you need. You should always ask the Builder to pass this discount onto you.
If the Builder asks you to go with him to merchants to buy the materials directly, drop him like a stone. It means he does not have an account which means he does not do much work; certainly in your area.
Expect to pay a builder or tradesman 30% of the contract value in advance. Make sure however this payment is receipted and documented.
Why should you expect the Builder to pay for materials for your house?
Can you go into a supermarket and fill your trolley while telling the check-out clerk that you will pay for them after you have tried them all? No, of course you can’t!!
All of the television programs which tell you never to pay anything in advance are made by people who have never spent a moment in the Building Trade.
The Builder will also need to build into his prices a percentage of the cost of his Public Liability Insurance, cost of tools, cost of travelling and cost of administration (invoicing, pricing etc). These costs are called “Overheads”.
The Builder is also in business; therefore he needs to make a profit to meet future costs of expansion or new equipment etc.
Skips and the removal of builders waste (excluding “inert” waste such as soil, brick, stone, concrete, plaster & glass) cost a staggering £40 per tonne. This is the amount the Government charges in Landfill Tax (1st April 2009). The Builder obviously has to pass this cost onto you.
It must also be remembered that excavations “bulk up” when soil is taken out of the ground. 1 cubic metre of soil, when excavated, bulks into 2 cubic metres although the weight remains the same.
When foundations are measured and calculations are made for the removal of spoil from site, check with your builder that the additional material is accounted for.
With all this in mind, make sure you have a solid contract with your builder and a signed agreement for an advance payment for materials and a stage payment system for the remainder of the money. All of this is done for you in a standard building contract you can get from DIY Doctor. You can download a copy of our free contract from our building contracts project page.
Basic Costs and Prices of Building Work
Again it is stressed that these prices are approximate and will vary greatly as the size of a job increases or decreases. They will also vary across regions of the UK.
Using the UK averages (Nationwide Building Society survey 2008) Building a standard 2 storey house (total floor area of both floors = c150m2) will cost approximately £820 per square metre. This price allows for budget fixtures and fitting and assumes there are no constraints getting in and out of the site.
Connection to all services, gas, electricity and main drainage is assumed to be straight forward.
Obviously the ground floor is considerably more expensive to construct than the upper floor because it includes foundations, drainage & concrete slab (or oversight). The upper floor is constructed with timber joists and floor boards of some kind.
This price will rise to approximately £1000.00 (m2) if you were to build an extension to the property at a later date, assuming the extension is over 30m2.
Smaller extensions are more expensive per m2 to build and a small extension, 3m x 2m could cost up to £1500 per m2.
We hope this information is of interest to you. It will not be long before we launch our much more detailed scheme whereby you will be able to get an accurate price on everything from a garden path to a new mansion.