Welcome to our special mini series called Home Truths. We’re gonna be talking about some common misconceptions in the world of renovating, bust some budget myths, and basically shine the light on how to avoid a stressful renovation. If you’re thinking about renovating or about to start, or you’re right in the middle of it, this is for you.

Amy: Okay, so welcome to our first episode of Home Truths. We wanted to talk today about why no one wants to tell you how much your project is going to cost, and if you’re renovating, you’ve probably experienced this for yourself. Jane, why do you think it happens?

Jane: Well, it’s really interesting because. As some of you may know, we’re actually doing our own renovation at the moment, and we’ve been speaking to contractors and the contractor. it’s like an early stage conversation, I guess. and the contractor came over and he said, you know, I’m not gonna give you a price right now, basically because if I give you a price, it really doesn’t help me at all, because if I go too high or even if I get it on the money.

You are probably gonna be talking to lots of other contractors who are gonna give you a lower price and then you probably won’t come back to me when it comes to do the tender because you’ve ruled me out because I’m too expensive. and if I go too low, then when I actually put my real prices together, when you actually have the final tender information, then you are gonna remember that first price and you’re gonna think that I’m somehow ripping you off, or you’re gonna be disappointed that it’s more.

So either way it doesn’t really benefit them to give a price in that situation, which totally makes sense. and really explained that kind of ghosting or kind of, um, avoidance that a lot of people feel when they’re trying to get this price. And, you know, we’ve experienced it a lot, haven’t we? Why nobody wants to really stick their neck out and actually give you a figure is because it’s not really helpful.

Um, it’s helpful for you, but it comes back to bite the person who’s told you. And as architects, I guess we experienced this, didn’t we? Um,

Amy: Yeah, absolutely. Because I think when you are giving that first price, um, even if the project then goes on to develop and, you know, more things get added in, I think as a client, that first price is still what is in your head. That’s like your bottom line. And so it, it is still a shock even if you know that you’ve added more things in and that is gonna be more expensive somehow you, you’ve just got that figure in your mind, and it’s quite hard to update. Um, but what would you say, so it’s difficult to get prices, so what should people do? Where, where can people go to get pricing information?

Jane: I guess, you know, you’ve got to be a bit investigative, is that a word? Um, you need to go out and try and work it out for yourself, and there’s different ways that you can do that. So. one thing is when you’re speaking to professionals, they might not wanna give you a figure for your project, but you might be able to say, like, if they’re showing you some of their other work, be like, okay, well how much was the build budget on, on that?

You know, if they’re showing you stuff on their website, maybe they’ll give you a kind of ballpark figure for somebody else’s project. Or what’s the typical project amount that they normally work with? Because that’s a much less committal on their part, isn’t it? They’ve not told you what they’re judging your project to be.

So maybe that’s one way around the conversation in those early kind of stages, but also just looking at real projects like people on your street who are having works done. If you can go round and maybe say, you know. Uh, we’re thinking about doing a renovation. I mean, I literally have two people on my street now doing renovations, um,

Amy: Have you, have you knocked on their door?

Jane: Well, that’s what I’m just thinking. What would I say to them? I think I would start by saying like, would you recommend your contractor? I think that’s a good in to be like, we’re thinking about doing works and then maybe side onto the whole and and how much, how much was it, you know, because it’s, it’s hard, isn’t it?

People don’t really like talking about money and also people don’t really want to. Think about how much they’ve just spent on their house because it’s usually big amounts of money and um, you don’t really, things keep on getting added on, so you don’t often tot it all up. I guess the thing that people do remember, perhaps is the contract value their

contractor, which as we’re gonna come onto is, is not the whole budget, but it is something that you can start to get a feel for how much things are gonna cost.

Amy: I mean, we would say probably one of the most, kind of common mistakes that maybe renovatorsget into is if they do give you that early ballpark figure, to take that and think, brilliant, we can afford that. You know, they say 50 grand, 60 grand, or whatever.

But actually he’s just talking about his portion of the works. And do you want to talk a little bit more about that? Like how,do contractors think about their works in relation to kind of the whole project cost?

Jane: Yeah, yeah, it’s definitely not the full picture. So sometimes contractors will price with some of the fittings and finishes as part of their estimate. So maybe they’ve included an amount for the kitchen or maybe they’ve included for flooring or doors and windows. Sometimes they haven’t.

Sometimes it’s just the shell of the build that they’re talking about. So first off, it’s not really always clear what is included in the kind of thing that they’re providing. or the kind of figure that they have in their mind is probably based on the type of work that they do or the things that they normally buy for a project.

And that varies massively between contractors. Some contractors like to use all their own suppliers and they’ll supply everything for you. Another contractors really rely on you choosing the people that you want, and therefore they won’t include that figure in the cost. So you can see straight away that that is quite a, a gray area and would take quite a conversation to really get down to.

Okay, so what’s included in that? What, what the prices you include, they probably don’t include for VAT either, they’re always thinking about costs Ex. VAT, they’re not gonna include for a contingency. They’re not gonna include for things like your consultant fees, like your architects or designs that need to be done, or structural engineer or building control.

You know, there’s so many, there’s quite a lot of scope outside of what they’re thinking about. Um, perhaps if you went to kind of like a, you know, a one stop shop, like a, a design and build extension company. They might be giving you the price in terms of this is the design side and this is the build side.

So you might be able to get a better idea there. But still there will be bits missing, so you have to be quite careful to, to kind of investigate that price.

Amy: absolutely. I mean, the VAT I think is just a really big one that catches people out. because you know, it’s 20% that’s like. A fifth of your budget, and if you are, you know, you are already out by fifth,

Jane: Yeah. And it’s surprising how much that that can happen. It’s such a surprise, isn’t it? Because they said, oh, it’ll be around, you know, 80 grand for this bit of work, or 50 grand or something. But then you get to it and you’re like, oh, oh, right. Yeah. Okay. So we’re adding that big figure on, and I guess the other thing that goes with that is the contingency because people don’t really talk about contingency.

It’s, it feels like, especially contractors don’t really talk about contingency, but it’s on every single project. So it really should be kind of baked into what the price is considered because it isn’t just like an unfortunate thing that happens if you’re unlucky. It’s something that happens on every single project.

So you need to have that budget there to use.

Amy: Well, I think the problem is, is that the contingency is often that bucket that’s kind of your backup pot of money, and I thinkThere will be something that happens on site that’s unforeseen. You know, there just always is, isn’t there?

It’s the nature of, of the beast that, um, there will be something that no one can foresee. And kind of just human error as well, because I think, um, you have to remember that humans are building something. And they’re juggling lots of things. They’ve got lots of things going on in their lives, you know, there is just like a human aspect to, to it as well.

Um, and that can be your design team and that can also be your, your build team. And I think sometimes as the client, when it, when you are talking about such massive amounts of money, you can be like. Come on guys, there, there shouldn’t be mistakes.

But I think, um, that, that just takes a bit of an adjustment and I think the contingency is, is just an important thing, like you say, to bake in. But what would you say? Do you think it’s a contingency of just your construction costs or would you try and bake in contingency throughout.

Jane: I think that comes back to what we were saying at the beginning. I was just thinking the same thing actually, that when you talk to your architects or designers at the beginning and you’re talking about your budget. you know, if you had a quantity surveyor who’s a, a trained professional, that gives you a kind of budget for the whole of the project, which, you know, if you were on a big project, you might have the budget to do, but most people on smaller projects don’t, which is why you don’t have a really in-depth cost at that time.

Um, they do include a contingency, it’s called design contingency. It is just based on the concept that right at the start of your project, you’re not really gonna know all the things that you want to include. So over the course of your design, there will be changes, um, in the scope of your works. And that contingency on your design aspect is as important as the contingency and the construction really.

But it’s just a hard thing to convey and to talk about, and it’s not practice for designers or architects to really talk about having a design contingency fund at the beginning.

Um, so yeah, it’s, it’s important to kind of just give yourself a little bit of leeway there at the beginning.

Amy: So going back to the costs, I guess we’re saying, remember when you’re talking to your contractor that he’s talking about just his portion of the works. So remember the other bits, um, we are saying if you talk to your neighbours, just remember that maybe they haven’t sat down and made their final sums of actually how much everything costs.

So the, you know, take it with a little bit of salt, Um, and then I guess people might think, well, surely your architects is in a position to give you kind of cost advice, and why wouldn’t they give you a price?

Yeah. it’s like the responsibility of it, isn’t it? Um, I guess for architects.

they’re either designing to your budget or they’re designing to your brief. And that is two different processes and often that isn’t very explicitly discussed.

Jane: I guess the thing for your architects is the, the, the kind of, the hard bit is that it is actually quite hard to predict contractor prices. There are lots of reasons why, you know, when you do tenders and you get prices back, they can be vastly different by, you know, tens of thousands of pounds due to the size of the contractor, how much work they have on, you know, what their team structure’s like, what they’re assuming the materials are going to be.

So, it’s quite hard for an architect to accurately predict what the range of prices from a contractor’s gonna come back with. And actually, if you did go to a a quantity surveyor and use the, the correct professional to, make those costings early on.

The price that they would come back with would probably be on the higher end because it including the correct profit, the correct amount for materials. They’d be really kind of pricing it up, you know, in inverted commas correctly, if you see what I mean. But then the prices might come back lower because of the reasons we’ve just discussed.

So for an architect, it’s really hard to predict that aspect and so what you would end up doing is if somebody said they had a budget, you’d constantly be saying, you can’t have that, I don’t think it’s gonna be in budget, but you wouldn’t know for sure. So you’d be talking your client out of including things that are hard to put back later. On the kind of side of thinking, oh, well you probably can’t afford that. Which one is a hard conversation to have. Two, it’s quite hard to prove because you don’t have the prices back yet. So in a way

they just don’t really know until they get those prices back. So. What are they supposed to do and how can they take responsibility for that?

Amy: I think it is a really tough one. because I think in our own, um, projects that we’ve done, Clients also want to be excited by what they’re gonna be investing in. And, and they, they do want to see the options and like you say, being told that they can’t have it because it’s not, in their budget is really tricky to take.

The way we get rounds it, I guess is, is doing that kind of low, medium, high options so they can see, okay, you can put more money into your budget and you get this, or this is what we think actually your budget like allows, and then often you kind of meet in the middle and maybe you try to cost engineer the things to, to get it back to the actual budget.

You know, like I think, um. It’s a lot harder to design for a budget than I think you might imagine as a homeowner.

Jane: Well, there’s lots of different aspects to it, isn’t there? So it’s like the build materials, the size of the build, but then also all the fittings and finishes. Um, the mechanical stuff, you are trying to predict the choices that your client’s going to make on all of those things. And quite often, even if you have the conversation early on, okay, so we’ve budgeted for like the minimum fit out.

Like this is the cheapest of everything. Uh, when it actually comes to choosing the things your client doesn’t choose the cheapest thing because obviously they’re like, well, I don’t want that one, I want this one. So it’s hard to do that on every single thing because you are really, you’re trying to second guess something that they’ve not had chance to consider yet.

So I guess all of this kind of means that it’s really just, falling out of the remit of an architect’s skills to, to really be a project manager, a cost person and to design a drawings and manage that all in one and they can kind of do the best that they can. But ultimately you as the client hold a lot of that decision making power and you have a lot of choices to make.

And I think if you as a, as a homeowner, if you, you’ve got to buy into the budgeting process.

And what would you say to the people who are kind of stuck in that loop of, um. They’re, they can’t get a price until they’ve got the drawings, but they don’t really wanna invest in the drawings because they don’t know if they can afford to do the thing.

Amy: So they, you know, it is like a bit of a chicken and egg situation

Jane: I think, well, one way that people tackle this, and this is the most popular way to tackle this, is just to ignore the budget, really. Like to do the thing that happens, which is

add in all the things that you want, like the bigger roof light, the this, the that, and then get to tender and then work out that you can’t afford it.

Then have to go back and then value engineer, which is.

Amy: is

Jane: A process of going through each of those things and saying, okay, well where can we save money? What’s important, what’s not important? And I guess that is a valid process. It’s just, it’s not really spoken about that much. So it feels like as a homeowner,

Amy: It’s just happened to you.

Jane: Yeah, it’s like how have we ended up here? You know? So you’ve bought into all these things that you’re getting, you know, we’re gonna have this and we’re gonna have this. And you’ve got excited about it all and then you’re having to like chop bits off or you know, sometimes just lop a whole part of project like completely off.

But that is a process and you can go through that. There’s another version, which is like very early on, which is where you’re stuck in that small eddy of, don’t really wanna pay for the drawings because we don’t know if we can afford it. Um, but you know, I’ve spoken to a contractor and they’ve said, okay, well when you’ve got some drawings, come speak to us and we’ll, you know, have a look at some prices.

So in that situation, you just can’t get started even. Um, so I guess for, for both of those things, in a way. You need to kind of build on this investigative aspect to really get into the details of what your project is and how much it’s going to cost before you go down the road. Like if you don’t wanna end up at that tender situation where you’re having to go backwards and it, or that you can’t start your project, there’s work to be done right at the beginning to bottom that out.

And actually, you are the best person to do that if you have a bit of help to work out how to do it.

Amy: Well, I guess, um, people go to cost calculators, don’t they? I guess what the problem with cost calculators can be that it’s not a hundred percent clear what’s included, what’s not included. Sometimes you don’t know what are the prices based on where in the country are they you know, what kind of projects are they even talking about? So I think, um, cost calculators can also come with, well, a lot of caveats, can’t they?

Well, when you, when you don’t have that detail, like the first thing is to do the thing and look at the price and be like, oh, well that can’t be right.

I’m gonna just change it, massage it.

Jane: yeah. And then you start to change the dropdown boxes and say, until you get to the point where you’re like, okay, I’ve kind of made this work because you know, we’ve gone for the lowest budget and even then you’re like, okay, well I don’t, I dunno if that’s totally right because again, if you can’t really see what it’s based on,

It doesn’t resonate with you because it doesn’t really make any

sense. And then I guess that’s, but we’ve seen that actually even on where projects have got a, a quantity surveyor really early on to do that thorough pricing. Um, it’s the same thing because it’s kind of, you get the price back, it’s more than you expect. And so you’re like. Well, I just don’t believe it. That must have, something must have gone wrong.

I’m sure we can get it for cheaper.

Amy: So I think unless you can actually engage yourself and actually be part of that budget making process, it doesn’t really mean anything. So it doesn’t matter if you get that price back because it’s not tangible, so you can’t really do much with it. So I guess, our answer to that is to reduce the unknowns or to add the specifics of your project to make it, to make it right for what you want to do. Um, because at the end of the day, if you’re going to a cost calculator, we know architects that have a price per square meter, which is very different from your standard cost calculator. And it’s because project is totally different and it’s making assumptions about lots of different fittings and what you’re gonna have, if you can, if you can break out of that cost calculator, all the things that make your project yours about what you want to include, you can reduce that unknown massively. So what do we mean by that? Um, like our method of kind of putting together a cost is going through your wishlist or your scope and pulling out all of those things that you can bottom out price wise. So that might be, you want a wood burning stove, okay?

Jane: That’s, that’s something you can investigate and get a price for, and that wouldn’t be included in a normal cost calculator. Or you want, your kitchen, you know, cost calculators might make an assumption of a price, whereas kitchens could vary now from 20 to 60,000. So. You can bottom out that price.

You can do your homework and find out where you are on that scale. The same with all your fittings and finishes, all your lights, your switches, you know everything that you’re choosing on the project. Whether you are having heating, whether you’re having a boiler, whether you are, you know, you kind of know these things.

And so our method is to get as many of those things in as separate items and then start to investigate those and work. You know, you are saying, yes, that’s a reasonable price for that. This is the kind of spec that I want for this thing. And once you’ve gone through that process, you can remove, you know.

Over 50% or 55% of your whole budget, you could bottom out like before you’ve even started, so that that remaining 45%, which is your contractor’s fees for doing the build works and doing the fitting of these things, which can vary, you know, if we’ve spoken at the start, can vary depending on. The location, their team, their profit margin, you are reducing that unknown to only about 40, 45% of the project.

So you can use a cost per square meter calculator for that part. Um, but it’s not wildly taking over the rest of your budget.

I think the thing that I found most painful, like being an architect, being a slight control freak and being a people pleaser means that if you have your client’s budget, that’s really, really painful to not have them totally understands, like who’s taking responsibility for that and, and, and, and just that kind of stress of being on this journey where you know that there’s gonna be this big moment where you get this big reveal of the prices and it’s not gonna be the thing that you want.

And that, that is a horrible feeling for somebody that you are trying to kind of guide your clients through this process. So I guess that’s why we’ve done this whole thing of setting up Home Notes and then building the app is, I guess it started off as, as like a method of us trying to reduce that risk and reduce those unknowns with our clients.

So that’s where it started. But then, that turned into trying to educate our clients about the different ways that this process works and, and when they have to make decisions. And then finally building that into the app that we’ve made so that it’s that balance between doing a project and sharing that risk between you, not because you want to push it off yourself, but because if you don’t have transparency with your client or if you are as a, a homeowner, if you don’t have visibility of the fees and the prices for different things and where you are getting them from.

It just doesn’t mean anything. It, it doesn’t mean that you can make decisions. So the concept is, is that if you have prices against all of these different things, or you went out and got a window quote, or the nice front door that you’re looking at, or all of these things, once they’re all in this budget together, then you can decide yourself like, oh wow, okay, so the roof light was six grand because it was this massive roof light needs a crane, you know, all this stuff. But my front door, that was really special that I wanted, well, that’s three gran. You can make the decision where you want that money to go, and if you want to go out and get another quote for something smaller that makes sense, that means that you are in control of making those decisions as opposed to just like, bam, like this is the price. And then it’s a little bit too late to go back in and redesign everything with a totally different roof light or you know, a different system.

Amy: And also, um, it really, it really worked. because the first project we did with the app was basically, The clients had a, had a budget, they couldn’t do the bigger extension. We had to kind of bring it, bring it in. So they actually couldn’t extend as much. And it felt quite, um, in some ways inhibitive.

But actually what was interesting is that the clients were in the, in control of choosing the fittings and finishes in the kitchen and, the. Products that were going into the projects.

And actually that’s where they decided, like you say, they were gonna compromise on the the, um, the roof light. They wanted this really amazing bespoke kitchen. they got to choose the moments where they spent the money. And actually it came in on budget, like the budget that they originally had. It didn’t go over time.

Like you know, it actually works. And it’s like kind of amazing because, um, yes, there was a painful conversation at the beginning

where it was like, oh, we were hoping to extend a bit more, or you know, but actually having that conversation where they had to compromise earlier on when you haven’t imagined what your future life is gonna be like in that space was easier than, than doing it later when you are at tender and then suddenly you have to work back, even, even your vision for your, for your life.

Do you know what I mean? So um, I was surprised in some ways just how well it worked.

Jane: Yeah. Yeah. Well, it’s not a, it’s not a natural place to be is to say. No, no, no. But it’s actually very different when you’re doing it with them and you’re showing them the figures and you’re like, okay, well that’s fine, but that’s probably gonna be this much, you know.

Amy: If you haven’t got that tool and you haven’t got that shared kind of process, then you would literally have to be like, I’m, I I say no,

Jane: You are working it out together. And that comes right back to the, the, the question at the top of the series, which is like, why won’t people tell me how much this thing is gonna cost?

I mean, I guess because like, one, they haven’t worked it out yet.

Amy: Yeah.

Jane: And two, it’s because they don’t want to take responsibility for your budget when

Amy: Well, they

don’t wanna tell you. No, you can’t. you can’t afford it.

Jane: Yeah. And so it’s just it on so many different levels and so many different ways. It’s not really something that’s within your capability, uh, to do and it’s actually something needs to be worked through.

But if you can work through that before you’ve actually done anything then that’s a much safer, kind of fairer, cheaper way to do it. And I, I remember you saying like, oh, I feel like I’m bursting bubbles every meeting. It’s like, oh, we’ve had this idea and it’s like, okay, let’s put it in the costings and see what it is.

Although it felt bad in the moment, I think that actually that was a very empowering process for them, that they actually felt really good about it in the end and in the end they were so like proud of, of what they had done.

Amy: yeah, absolutely.

Um, there was one other thing I wanted to say um, it also helps in those early days because, recently I talked to someone who was hoping to do, a loft extension and also a small rear extension. But actually as we talked about it, they were also gonna be refurbishing the whole ground floor and, and basically, you know, upstairs as well.

So what seemed like in their heads was quite a small project, once you started putting in the actual figures and square meters and, and had it kind of on these different lines, it was just, I think triple over their, their budget and then you have a different conversation.

It’s like, okay, so what is the most important thing? Actually the loft extension can be done at a different date. You know, you start talking about phasing, you talk, you know? And I think what’s so empowering about that is this strategy. Exactly. And I think so often you just kind of like run at it and hope like it’ll all be okay and

that is also a strategy, but it’s so much more stressful and like you’re not in control of what’s happening to you. And so, um, yeah, I just thought it was quite interesting because they, they were like, okay, I need to go away and just, talk it through and, and discuss what, where we’re gonna spend the money.

That might seem depressing, that you can’t afford everything you want, but actually it’s also empowering because you’re like, with that information, I can now make some solid decisions that are based on something, you know, instead of just, yeah, hoping for the best.

Jane: Yeah, and just to kind of summarize, so I guess what we’re saying is, it’s not that people are purposely being elusive because underlying it, I think that from a homeowner’s perspective, it feels like there’s some trickery going on there. You know, that you don’t want, nobody wants to tell you, or the professionals don’t wanna tell you because they kind of want more money or something I don’t know. There’s some kind of hidden reason. I hope that what we’ve just spoken about is kind of explaining the complexity of why it’s hard to do that as a professional and, and just why it’s so hard to come up with these figures. Um, if you put in that time up front, it is within your power to, to get over that first hurdle. Absolutely. so stay tuned for next week.

Amy: We’re gonna be doing another of our home truths, in this series and we are gonna be, talking around, you know what you want but dunno how to get it.

So if you’re in that predicament where you have a clear vision of the type of home you want to create, you’ve seen it on Instagram, but you are frustrated because everyone’s saying that’s not in your budget and you dunno how to go forward, then stay tuned.

Jane: Bye. everybody.