After calculating how much your house extension will cost, it is essential to allow for an appropriate amount of contingency. Contingency budgeting enables you to prepare for unforeseen circumstances and unexpected costs that may arise during the extension project. In this article, we will explore the factors to consider when determining how much contingency to set aside for your extension, helping you navigate the financial aspects of your project with confidence.
How much to allow for contingency for an extension
The industry standard has been 10-15% for a typical house extension. However, during a recent study of architects, some are recommending 15-20% due to recent fluctuations in construction costs. See our full article to estimate your extension costs.
Extension image above from Oliver, architect from London on Design for Me. See more of his work and shortlist him for your home project here.
Why you need to allow for contingency?
A contingency budget acts as a financial safety net to cover unexpected expenses during your extension project. These costs may include material price fluctuations, design modifications, unforeseen structural issues, or delays due to adverse weather conditions. By allocating a contingency budget, you can minimise the impact of these unexpected events on your overall project budget and timeline.
Do I need a contingency if its a small/ simple project?
The complexity of your extension project plays a significant role in determining the appropriate contingency budget. The more complex the project, the higher the likelihood of encountering unexpected challenges. Factors such as site conditions, the age and condition of existing structures, and the extent of design changes can increase project complexity and, subsequently, the need for a larger contingency budget.
Do I need a contingency for a design and build project?
A design and build project does offer more cost certainty than a traditional project, so a lesser contingency may be fine. However, bear in mind that client changes (i.e., you changing your mind about the design) can, in fact, be more expensive than a ‘traditional project. See our full article for the pros and cons of design and build vs traditional.
Getting an accurate budget for your extension
Speaking to experienced professionals early in your extension design process can give you a firmer idea of your project costs and how much you should allocate for contingency. Architects can help you identify potential areas of concern and suggest an appropriate contingency budget based on their expertise and previous project experiences.
Prioritise contingency expenses
Once you have determined the size of your contingency budget, it is essential to prioritise potential expenses. Identify the critical areas where unexpected costs are more likely to occur, such as structural alterations, plumbing, electrical work, or issues related to planning permissions. By understanding the potential risks, you can allocate your contingency budget effectively and ensure that you have sufficient funds for the most critical aspects of your extension.
Regular Monitoring and Communication
Throughout the project, it is crucial to monitor your expenses and communicate effectively with your project team. Regular updates and transparent communication will help you stay aware of any cost overruns, potential risks, or changes that may require adjustments to your contingency budget. By staying proactive and addressing issues promptly, you can minimise the impact of unforeseen circumstances on your overall project budget.
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