How to Cost Your Extension

With any home development project, one of the biggest considerations is the cost.  Most of us will have a budget of some kind to work with but how do you know what you can do with this budget?  How do you select the right kind of extension for your home but also your budget?

Self-build extension costs

When looking into the cost of self-build extensions there are lots of variables that make it difficult to say exactly what a project will cost without specifics.  But there are some general ideas to help and factors to consider to get some ideas.

For example, some of the variables that might affect the cost of the project include:

• What the extension is going to be used for
• What size extension you want
• The location of your home (the most expensive locations can put up the price of an extension by as much as 30% versus cheaper locations)
• The type of soil around the property (as if effects the foundations)
• How much glazing you want in the extension

Experts say that a straightforward extension will cost around £1000-2000 per square metre.  For a higher specification, this cost will increase and can be around 40% more for the very highest specification available.

Build or self-build?

Another factor in the cost of the extension is whether you have someone build it for you or go down the self-build route.  Self-build has become more popular and there are also many variations that allow you to handle the aspects of the project you have the skills for while handing off other areas to contractors.  Some people choose to project manage their self-build or do just some jobs themselves such as interior decorating.

There are four common routes for the extension:

1. DIY – build it mostly yourself which will save around 30% of the budget on the cost of labour while still using some contractors for some specialist areas; includes purchasing materials yourself
2. Self-managed with contractors – directly hiring contractors to work on the project with minimal DIY element and overseeing the project yourself: most materials purchased yourself
3. Main and sub-contractors – using a main building or package company who supply the extension to a certain stage then subcontractors are used to finish the project on-site: materials purchased from the supplier yourself
4. Main contractor – builder works as the main contractor and handles the project with minimal involvement of the property owner: materials purchased by builder

Other costs to consider

The more storeys the extension has, the more it will cost.  So a single storey, basic spec extension might cost £1000-1700 while a top-quality spec might cost £1900-2100 per square meter.  While the cost of a two-storey extension won’t alter the price per square meter, obviously there will be more square metres required.  However, it isn’t a straight doubling of the price because things like a roof and foundations are only made once, regardless of the height of the extension.

A common slip up that homeowners make when budgeting for a project is that they forget about VAT.  Most materials and labour costs will be subject to a standard 20% VAT rate, particularly if you use a contractor.  Some local tradesmen may not be VAT registered but you will still have to pay this for the cost of the materials. There are some projects that can receive VAT relief including:

• Converting an existing dwelling that changes the number of units (VAT reduced to 5%)
• Working on a listed building (VAT reduced to zero)
• Working on a building that has been unoccupied for at least the last two years (VAT reduced to 5%)

To gain these benefits, you do need to use a VAT registered builder for the work so if you aren’t one yourself, you can’t claim the VAT relief.

Quote versus estimate

When you are going through the stage of getting prices for the extension, there is one thing to understand – the difference between a quote and an estimate.

An estimate is an educated guess on the half of the contractor who is giving an idea of the cost based on their experience and the information you have given them.  It can be given verbally or legally but either way, it is not legally binding and can be changed depending on the work done.

A quotation is a definite price.  A written quote should itemise the work being done, provide a breakdown of costs and a total as well as state if VAT is included in the price.  It should include any caveats that might lead to higher costs. A quotation is usually legally binding as long as things have not been changed.

Shop around

No matter what route you take for your extension or what type of extension you want, it is a good idea to shop around and talk to different experts about what might be best.  From oak framed extensions to two-storey brick extensions there are many different options and chatting with experts help you find the right one.