top of page



Why do I need a budget for my building project?


You have a dream for a project that meets your needs for design, function and comfort. To see that through from concept to completion you are going to need enough funds. Planning for this is advised and time well spent. It is well documented that building projects cost more than anticipated. We want to give you the tools that should minimise this for you.


How do you work out a budget for a building project?


You could:


1. Ask a design or cost consultant professional for an unbiased opinion.


2. Ask builders. Most builders are not sure of a £/m2. They will cost the project for shell only excluding VAT and it still won’t be to building regs standards. It can be better to seek 3rd party advice before approaching a builder.


3. Ask friends and neighbours who have built recently. If they are willing to let you know the costs, these may be from before the price increase, so it is important to get the dates of the contract period (as prices go up) and ask for the total cost including VAT, design fees etc.


4. Read our article below!

enbee architecture and design _ Natalie Black _ Retrofit Architect _ Natural Materials _ M

Image from Muswell Hill Low Carbon House with retrofitted walls having U-values of 0.15 W/(m2K) for the back wall and 0.30-0.32 W/(m2K) for the side wall. These walls were originally about 2W/(m2K) as is standard for solid masonry walls of period properties.

How much did building costs go up in 2021-2023?


Where do you start...? We've had Brexit, COVID, the Ukraine war, Liz Truss's 49-day stint as Prime Minister. The consequences are so clear now. 


-Import complications brought about by Brexit pushed prices up and reduced the labour market numbers.

-Fuel price increase

- Economic uncertainty

- Interest rate rise

- Inflation

-Cost of living increase


How has this affected building costs?


On average prices overall went up by about 35-40%. So, projects that were in the £/m2 range of £2k to £3k/m2 in 2021 now find themselves in the bracket of £2.8k to £4.2k/m2. This is naturally tough on clients however it is better to start a project with this in mind than to find additional funds during the process. 

enbee architecture and design _ Natalie Black _ Retrofit Architect _ Natural Materials _ M

Image from Muswell Hill Low Carbon House extension detail

How do you allocate the project funds that you have? 


E.g A budget of £300,000 as your maximum spending capacity.


1. I would say that you need to allow for: 


- 20% for VAT*

- roughly 20% for design consultants’ fees (when retrofit is included) and various fees such as planning and building regulations. 

-10% to 20% contingency


Keeping a contingency sum for unanticipated work on-site (e.g. rotten joist needing replacement), price increases etc is recommended. This averages out between 10-20% depending on the amount of surveying undertaken early on and the overall condition of the building.


As Contract Administrator, we play a mediating role to assess that variations to the contract sum (extras) are fair to the client and that the contractor has enough funds to reach the end of the contract.


What do you get from your £300K building budget?


£200,000 x 50% = £100,000


This should approximately cover:


  • VAT (20%)

  • Contingency (10%)

  • Most of Consultants Fees below

    • Architect/ CA/PM

    • Structural Engineer

    • Party Wall

    • Planning

    • Building Control

    • CDM

    • Cost Consultant


Other consultants you may need for specific planning requirements or additional design consultants such as an interior designer or landscape gardener will be additional.


Other potential costs:

•  Rental costs for the duration of the works if moving out

•  Removals in and out

•  Storage costs

•  Additional insurance costs

•  Interior furnishings such as sofas, rugs, curtains or other furniture

• Landscape or gardening

This means that the value of the contract that you should sign with the contractor would need to be £200,000 to keep to your total budget of £300,000. 


It is also worth breaking up the £200,000 contract sum. You might like to have a budget for fittings, finishes and windows/doors. The selection of these can have a huge impact.


For example, you might choose a £20,000 + VAT kitchen or an £80,000 +VAT kitchen.


Windows and doors can also have a massive range. When we did up our own house, I spotted some beautiful pivot doors on Pinterest and found the supply company. We got our window drawings priced by them and they returned with a quote of £60,000 + VAT. This was for a 2m2 picture window and 2.2 x 2.4m2 patio doors! The ones we bought, that were within our budget came to about £8,000 + VAT.


The balancing act of budgets moving up and down can be minimised through the research being completed at the beginning. Things like windows and doors can be researched and quotes obtained beforehand. Deposits can also be given to lock in the price before starting on-site.


*Notes on VAT.


-Some energy measures attract 0% VAT however currently this needs to be a stand-alone piece of work rather than combined with all sorts of refurbishment work. We have a VAT advisor contact who can help navigate this as it is generally is too complex for most domestic contractors.


-Reduced rate of 5% VAT for properties that can be proven to have been empty for 2+ years.

enbee architecture and design _ Natalie Black _ Retrofit Architect _ Natural Materials _ M

Time to reach out to Jamie Gould.


Let me bring Jamie Gould from Contra Faba, who are Cost Consultants for the Construction Industry, into the conversation. I reached out to Jamie last year as the prices were so fluid I felt it best to involve an expert who is constantly pricing projects to get involved.


Why are construction costs high in 2024?


There is a bit of complexity around this question. There will always be a slight increase due to natural inflation, but the big burst from Brexit, COVID and Ukraine was an anomaly that nobody could have predicted.


In actual fact, material costs are currently reducing and we’re seeing a 1.9% decrease from 2023. However, there are still factors which are causing certain aspects of construction to increase overall.


Interest rates are one, and the long-tail effect of Brexit is still having a toll based on new rules and regulations for bringing materials into the country. 


On the plus side, as we move away from rampant inflation, we are seeing less of a demand for building projects to go ahead. This is causing a huge demand for builders to find new work, so end-users have a little more negotiation power at the moment than before.


How do 2024 building costs compare to 2023?


In the last 10 years we’ve seen an average of 4.6% increase year on year. We’re predicted to see an increase in building costs of between 3-3.8% from 2024– so lower than the average. It’s also lower that last years increase of 4.2%. We’re seeing less of a spike and more of a levelling out in costs.


How do you work out your average costs for a domestic building project?


We use a mixture of benchmarked data, current material prices and discussions with contractors to ascertain current labour rates – this is then combined in a feasibility estimate to give clients a clear overview of expected costs before they invest too much money and time in the project.


A feasibility estimate example can be found below.


Is there anything else you do or offer to help clients?

If you could list your top tips for a domestic client’s budget management, what would they be?




  • Put together a wish list of what you want to achieve (additional space, new layout, extra bedrooms etc)

  • Come to the table with a clear (and realistic) budget – including cash available and equity for the project (mortgageable).

  • Set aside funds to conduct a measured survey.

  • And funds for an estimator to complete a feasibility estimate to get an accurate idea of costs.


Design Stage


  • Research the cost of finish items to prevent scope creep.

  • Choose the right contract (there are a lot to choose from and picking the wrong one can be detrimental – ask your contract administrator for guidance)


Tender Stage


  • Ensure all contractors are following the same tender template.

  • When reviewing, make sure you’re comparing apples with apples.

  • Keep an eye on anything that’s been “missed out” to lower the overall price.


Post Contract


  • Get a Quantity Surveyor to help manage the budget.

Image from Muswell Hill Low Carbon House showing extension built to Passive House standards.

Thanks, Jamie, back to Enbee.


Are there any Funds that can help with retrofit?


In some cases, grant funding or low-cost financing may be available to help pay for some measures. Item in green most likely to apply for the ‘able-to-pay’ market (clients who have enough funds to pay for renovations).


Boiler Upgrade Scheme


Provides homeowners with a £7,500 grant towards the cost of installing a new heat pump. Heat pump installations are also zero-rated  for VAT.

Camden Climate Fund


The Camden Climate Fund provides funding of up to £5,000 (up to 50% of costs) to support households and landlords install energy efficiency measures to help reduce heating demand, lower bills and cut associated carbon emissions.

Great British Insulation Scheme (GBIS)insulation


Offers eligible homes a single low-cost insulation measure, either fully or partially funded. This is currently being offered via energy suppliers.

Energy Company Obligation (ECO)

The ECO scheme supports energy efficiency measures in the home of those considered to be in fuel poverty. This can be applied for via your energy supplier or ECO-funded installers.

Do please note that in the changing political climate, information and criteria for grants and loans can change rapidly. Your chosen installers for each measure will be able to advise what funding is available at the time of your enquiry.

Lendodlogy Energy Efficiency Loans

The climate emergency and the rising cost of energy is causing us all to worry about the future of our planet and our household budgets. Lendology is proud to be able to offer Energy Efficiency Loans to help you make your property more environmentally friendly. £1000 up to £25,000. (4.2% APR). Funded by councils, mostly outside of London.


Nationwide Additional Energy efficiency Mortgage


Choose from a 2 or 5 year fixed-rate mortgage. Get 0% fixed interest for the first 2 or 5 years. Borrow £5,000 to £15,000, depending on your circumstances. Borrow up to 90% of the property value (LTV). There are no product fees with this mortgage. Applicants need to have an existing Nationwide mortgage for a minimum of 6 months.



Some retrofit measures are zero rated for VAT however the criteria is complex and is likely to require the assistance of a specialist VAT advisor. 

enbee architecture and design _ Natalie Black _ Retrofit Architect _ Natural Materials _ M

Image from Muswell Hill Low Carbon House entrance hall

We have a regular column. Do you have questions you would like answered? Feel free to send us your questions.We write this journal to benefit you from some of the things we have learned over the years. Do you have a project you would like to discuss in more detail?


To build responsibly for people and planet.

Designed for you, built fit for the future.


We retrofit and build with natural materials to:

- lower your energy consumption by 60-95%,

- improve your quality of life and well-being,

- give you greatly improved indoor air quality,

- for positive environmental impact.

bottom of page