The biggest reason building projects go over budget is typically not poor planning, but hidden costs that aren’t accounted for.
These are expenses that are often overlooked or cannot be accurately quantified at the start of a project, but can quickly increase your total spend if you are not prepared for them with a contingency budget. It is not unusual to have some uncertainty in a building project, as to eradicate all uncertainty before you start would be very expensive, if not impossible. And if you try to do this, you are unlikely to ever start! Understanding where this uncertainty is allows you to see the potential for risk of hidden costs occurring and be ready for them.
What Are Hidden Costs in Building Projects?
Hidden costs are expenses that are not clearly included in the original quote or those that are very difficult to predict before work begins. They often appear during the project and can catch homeowners off guard. This includes items which are clearly understood in the building industry as being unable to be fully defined, such as the cost of groundworks, which homeowners new to building may not be aware of.
These costs are common because building work can involve many unknowns, changing decisions and varying site conditions.
Why Homeowners Often Miss These Costs
- Quotes are too basic or lack detail
- Focus is placed on the total price, not the breakdown
- Some costs depend on what is discovered during the build, especially in the ground
- Changes are made after the project starts
- Very new to home improvement, DIY and construction and unaware of what can happen
- Poor communication or understanding – both parties need to work hard to understand what is meant
Understanding these potential risks early helps you plan more accurately and can assist you in allowing a contingency budget to cover these unforeseen costs. It is important to note that no one wants to find hidden costs as they can have serios negative consequences for the project and all involved. It is the responsibility of all to work to try and identify them in advance and plan for them. This is largely by ensuring there is sufficient contingency.
1. Groundworks, Demolition and Site Preparation
Preparing the site is often more complex than expected and this is one of the key areas for hidden and unexpected costs. Costs can increase due to:
- Removing existing structures or materials; surprises can and do regularly occur
- Dealing with uneven ground or poor soil; even with sample tests, anomalies can occur
- Installing proper drainage systems or having to move drainage; often combining the risk of digging and those associated with drainage
- Finding unexpected buried objects in the ground; no one knows what’s below the surface until you start to dig
These costs can vary significantly depending on site conditions and the actual problem at hand.
2. Waste Disposal and Clean-up
Waste removal is a regular part of construction, whether it’s stone, soil and rubble from excavations or demolition, an old bathroom or kitchen or simply just timber offcuts and empty sand and cement bags, but it is not always fully included in some quotes. Waste can be left of site or remove arranged by a specialist waste removal company, so do not assume it will be included.
- Skip hire and collection fees; are the number of skips itemised, or is all waste being removed?
- Extra charges for heavy or excess waste
- Final site clean-up; is you expectation of the site at the end of the project the same as your builder
- unforeseen specialist removal needed for hazardous/toxic/dangerous items if they’re found e.g. asbestos; very rarely will this be included unless your contractor has this specialist capability.
These costs can add up very quickly if not planned and budgeted for. Ensure you ask the questions if you are not sure.
3. Access and Equipment Costs
In some cases, specialist equipment may be required to complete the work safely and efficiently, such as specialist access equipment, drilling or boring equipment or tools and sometimes even specialist products are required to complete a project.
- Scaffolding or climbing rigs
- Access platforms
- Plant or machinery hire
- Specialist fire escape Velux windows, paint, plaster and other selected, specialist products
- Site security such as fences, access protection or anything needed to ensure the site is safe and secure
- Welfare facilities; site hut and loo, so the builders are no using your lovely guest bathroom
Additionally, the need for specialist gear can often make a project take longer than expected, and this overrun and additional staff time can easily increase overall costs.
Using Price to price jobs takes care of many of these potential pitfalls and helps to account for many common oversights. Click the following link to create your free account and get started.
4. Changes to the Project
Another extremely common causes of extra costs is making changes after the work has already started. If this happens then often materials already purchased have to be changed, plans need to be redrawn and work schedules changed or even additional work added.
- Upgrading materials or finishes
- Altering layouts or design features
- Adding new work not included in the original plan
- Unforeseen issues force change not seen at the outset.
- Planning or regulatory changes enforced on you; perhaps the building inspector requires a change
You may not think it but even very small changes can have quite a dramatic affect, both on the cost and also on the timeline. If you do have a change of heart and want to make a change, let you builder know as soon as possible, and be certain about what you want instead. Huge amounts of time can be wasted deciding on a new design and this will most likely be passed on to you.
5. Unexpected Structural Problems
This can be a really big one! In this situation, serious structural issues such as badly degraded concrete, bricks etc., dry/wet rot, insect attack and any number of similar issues only arise when construction or renovation begin.
- Weak foundations
- Damp or water damage
- Outdated electrics or plumbing
- Timber rot and decay or insect attack
These problems must be fixed when they are discovered, no matter how much they may scupper any plans as you need to ensure full safety of the structure, which in turn can also increase costs.
6. Professional and Legal Fees
Unfortunately this is often an issue associated with those that are new to this process, that aren’t familiar with all the potential pitfalls, so only the build costs are generally accounted for and the other less obvious costs are missed.
- Architect or design fees
- Structural engineer input
- Planning permission and approvals
- Environmental and ecological surveys
- Building control fees
These costs are essential to get the project underway, but not always in builder quotes. Some, such as Building Control will likely be eluded to but many of the others they would expect you to have in place prior to going out to tender.
7. Utilities and Services
Connecting or upgrading services can be more complex than expected. Pipes and wires can be buried in walls in floor voids with poor access, gas can only be touched by a GasSafe engineer and some drains can only be adapted or moved with local authority approval, which can be costly and time consuming.
- Electrical upgrades
- Plumbing adjustments
- Gas or drainage connections
- Water and waste water connections
Costs very often depend on the condition of existing systems, what and where needs moving (if anything) and who needs to be consulted or grant permission. This may only become clear during the project.
8. Finishes and Final Details
The final stages of a project are often underestimated and an area where costs can easily escalate. These normally come in the form of delays or setbacks such as waiting for 2nd fix and finishing completion, delays with appliances and similar issues.
- Painting, decorating and finishing
- Flooring and tiling
- Fixtures, fittings and appliances
These elements can significantly increase the final cost if not budgeted for early. These are the things which you will see so it is very important to plan an budget through the build so that you have sufficient resources to achieve the finishes you are wanting.
By getting your project priced by a quantity surveying service, such as Price Doctor, allows you to see where the costs are allocated in the course of the build, which will help you to ensure you have enough budget at the end of the project for your desired finishes. for more information about how to get your plans priced create your free account and get your project priced for you. .
9. Delays and Time-Related Costs
Delays of any kind can significantly increase overall costs in several ways, some of these we have touched on above but to summarise a little fuller:
- Additional labour time
- Extended equipment hire
- Temporary living arrangements if needed
- The need to source alternate products/materials if originals become unavailable
- Contractors or sub-contractors let you down/up they’re costs
Delays are often caused by weather, supply issues, unreliable 3rd parties or any unexpected changes to the project. Try not to add yourself to the list; builders waiting for clients to make decisions, order products or make payment can sour the relationship very quickly!
9. Environmental and Ecological Requirements
Nowadays much emphasis is given to the environment particularly with activities which are so ecologically disruptive as building. As a result even new projects require surveys and studies, some of which can only be done at particular times of year, so if you miss your window you simply have to wait until next year. Here are some of the most common:
- Preliminary Ecological Appraisal (PEA); this is the initial assessment (formerly known as a Phase 1 Habitat Survey), combining a desk study and a site visit to identify potential constraints.
- Ecological Impact Assessment (EcIA); this is a more detailed evaluation of potential impacts, often required if the PEA identifies significant risks
- Protected Species Surveys; bats, some newts and other animals are protected species so therefore will need to be protected from disruption of any building work however small in seemingly inconsequential.
- Botanical Surveys: Expert identification of plant species to assess habitat quality
These can be key requirements for your planning application and without them the application will immediately be rejected. To avoid these delays you need to have everything completed in advance and ensure you have budgeted for these costs, as they will not be seem in the builders quote, as he will has typically expected you to have all this in place prior to engaging with him, unless he is assist with your planning application.
By recommending Price Doctor to your would-be builder you will both benefit from our extensive services, both ensuring all elements and costs are covered and also minimising any potential hidden costs and unwanted disagreements – Click below to get started.
How to Protect Yourself from Hidden Costs
Unfortunately although it would be nice, it’s virtually impossible to remove all types of risk no matter how well you plan, but you can certainly reduce it by:
- Requesting a detailed, itemised quote
- Clearly confirming what is included and excluded
- Setting aside a contingency budget (around 10–15% of total cost)
- Finalising decisions before work begins
- Ensuring you vet any trade professionals you use to the fullest
- Also make sure this is the case for any sub-contractors they may use
- Discuss the project in detail regularly with the contractor and team on site to ensure all parties have a clear understanding of the outcome desired
- Ensure full availability of products and materials
- Make 100% sure all legal and Building Regulations documentation is completed and submitted if needed
- Also that you obtain any works completion certificates e.g. minor works, gas install certs and the likes
Preparation and clarity are the best ways to stay in control of your budget. It is very hard to do this properly without a clear and detailed price breakdown of the project costs. It is unreasonable to expect your builder to share itemised component level costing for you project, so you will find it very helpful to have your own drawn up – that’s there Price Doctor can assist you.
Key Takeaway
Hidden costs are unfortunately a normal part of building projects, but with proper planning they should not catch you off guard. By understanding where extra costs come from and planning ahead, you can avoid major budget surprises and keep your project on track and also in budget.
