Calculating your building costs
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How do I calculate my building cost

We all know that the building cost of a new home, extension or conversion can be high, but how do you calculate and set your budget?

When you're thinking of building a brand new home, adding an extension to your house, or converting a loft or cellar area, one of the most important things you need to do is set a budget. This will allow you to save or borrow the right amount of money for your project to be successful. Once you have plans and planning permission, your chosen builder can give a you a building cost, but there are additional costs to be taken into account.


This part of your budget only applies if you are building a new home. Buying a building plot can take up around 30% of your overall budget, so you need to research the average plot prices in your area to see if you can afford to buy land and build a house, or if it would be more cost-effective for you to buy an existing property and extend it.

Planning costs, finance and fees

You will probably need to borrow money for any building work you carry out. If you are building a new home, you will need a Commercial Build Mortgage. If you are improving your home you can extend your existing mortgage or take a out a separate loan. Whichever applies to you, you will need to add interest charges and fees to your building cost budget. This includes the monthly payments you need to make whilst your project is in progress, along with fees payable to solicitors, surveyors, architects, land agents and the planning office. Don't miss anything out - these costs can add up very quickly.

The building cost

The cost of the building work will be agreed between you and your builder. When you are setting a budget, it makes sense to speak to a few builders to get an idea of the general cost. When you ask for a formal quotation, make sure you get one in writing and in detail, because this will help you create a budget that you can easily control. If you can see where each payment is going, it will help you keep track of your spending, and to query any costs that differ from your agreement.

Finishing and decorating

Once your home, extension or conversion is complete, it will need finishing, decorating and furnishing. Don't underestimate these costs. If you can decorate yourself, that will help to keep your costs down. Look for furniture in sales, or ask for discounts if you are buying a large amount of furniture from one store. Look at all the ways you can to save money, and make sure you have allocated enough in your building cost plan to complete your project.

Outdoor spaces

Extensions and re-builds usually means there will be some disruption to your garden. Plan to have some money in your budget to re-pave, re-turf or add new plants. If you are building a house from scratch, your building cost plan will need to include money for landscaping and planting, plus driveways and boundaries.


Always have a contingency amount available. This could be a fixed amount, but it is easier to make it a percentage of your total spend. Therefore, if your project building cost is 20,000, have 10%, or 2,000 available in case the project overruns, materials need changing, or you change your plans.

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