A Guide to House Renovation Budgets and Timelines

Start with two budgets, not one

Almost every renovation that goes off the rails does so for the same reason: the budget was built around the build itself, and nothing else. Your build cost is the money your contractor needs for labour and materials. Your project cost is everything else — and it is usually far larger than people expect.

Alongside the construction figure, plan for architects' and structural engineers' fees, a measured building survey, building control charges, a party wall surveyor if you share a wall, asbestos and drainage surveys, skip hire, scaffolding, temporary storage or rentals, and the decorating you inevitably end up doing yourself at 11pm. As a working rule, professional fees land somewhere between 8% and 12% of the build cost on a straightforward extension, and comfortably more on a listed property or a complex structural rearrangement.

Write both numbers down before you instruct anyone. A project that looks affordable on the build figure alone rarely is once the second budget appears.

Set a contingency you never intend to spend

A contingency is not spare cash for a nicer kitchen. It is the money that absorbs what the building has been hiding from you, and there is always something.

• 10% minimum on a modern property in good order.
• 15% for period homes, or anything involving structural alterations.
• 20% where ground conditions are unknown, where you are digging near mature trees, or where the property is listed.

The usual culprits are depressingly consistent: dry rot behind a plasterboard wall, asbestos board in a 1970s ceiling, foundations too shallow for a two-storey addition, a cracked lintel, a drain that runs exactly where the new footing needs to go. None of these are exotic. All of them are expensive.

Keep the contingency in a separate account and treat spending it as a decision, not a reflex. And if you reach the end of the job without touching it, that is a good outcome — not a budget surplus to be spent on bespoke joinery.

Get to grips with VAT early

VAT catches people out because it is invisible until the first invoice lands. On the majority of domestic renovation, extension and repair work, VAT is charged at the standard rate of 20% on both labour and materials. On a £90,000 extension, that is £18,000 you need to have budgeted for, not discovered.

Some work attracts the reduced rate of 5% — for example renovating a home that has stood empty for two years or more, or converting a non-residential building into a dwelling. Qualifying energy-saving materials have enjoyed a zero rate in recent years, though the rules shift. Always confirm the current position with your builder and, where the sums are significant, an accountant.

Two practical points. First, ask every contractor to state clearly in writing whether their quote includes or excludes VAT. Second, be wary of buying materials yourself to "save the VAT" — as a homeowner you will generally pay it anyway and cannot reclaim it, and you take on responsibility if anything arrives damaged or wrong.

Listed buildings deserve a special mention: the zero rate for approved alterations ended some years ago, so repairs and alterations are now standard-rated. Budget accordingly.

Phase the work: structure first, finishes last

The sequence of a well-run job is not negotiable, and getting it wrong is one of the most expensive mistakes a homeowner can make.

• Groundworks, foundations and drainage
• Superstructure, roof and making the shell weathertight
• First fix — electrics, plumbing and heating pipework
• Plaster and screed, then a proper drying period
• Second fix — sockets, sanitaryware, radiators
• Decoration, then flooring last of all

Do not let the excitement of finishes pull you forward. Laying flooring before plaster is dry traps moisture and ruins the boards. Installing a kitchen before services are in means pulling it back out. Moving a wall after first fix means rewiring and replastering the room you have just paid for.

Do, however, order long-lead items early — glazing, roof lights, bespoke joinery, kitchen carcasses. Just make sure the site can store them securely and dry before you take delivery.

What actually drives your timeline

Pre-construction takes longer than most people allow. Design work runs four to eight weeks; householder planning applications are typically determined within eight weeks; building regulations approval adds two to five; and a party wall award can take two to three months if neighbours are involved. Never start demolition before consents are in place.

On site, realistic durations look roughly like this: a bathroom one to two weeks plus drying time, a kitchen two to three weeks, a loft conversion eight to twelve weeks, a single-storey rear extension twelve to sixteen weeks, a two-storey extension sixteen to twenty-four. Weather, trade availability and building control inspection slots all move these figures, so add a fortnight of slack to every phase and resist the temptation to book a holiday the week the job is "definitely finished".

Manage the money as the job runs

Pay in stages tied to completed milestones, never in a single large deposit up front, and hold back a retention of 2.5% to 5% until snagging is done. Agree any variation in writing before the work happens, not after. Keep every quote, invoice, variation note and building control certificate together — you will want them if you sell, and they are worth their weight in gold if a dispute ever arises.

Spending a little more on good professional advice at the start is almost always cheaper than correcting a structural or sequencing mistake halfway through. A renovation is manageable when the budget, the VAT and the order of work are settled before the first skip arrives.