Having a fixed and limited budget needn’t discourage you from adding an extension to your home. There are plenty of ways you can create a good-looking and functional new space by planning and designing it with cost know-how in mind. 

This guide covers common extension cost issues such as:

Choosing the Right Size Extension

Before you start planning your extension, work out whether the cost of building it and fitting it out is equal to – or hopefully less than – the amount it might add to your home’s asking price. You can do this by talking to an experienced local estate agent.

As a general rule, the more square footage you add, the more your home’s value should increase (but beware of ceiling prices in your area – it could mean that an extension does not make economical sense). However, the bigger the extension, the more it will cost.

By contrast, smaller extensions, with less square footage might give you extra space, but don’t tend to be very cost-effective. Getting the balance right by building an extension that’s just a proportionate size, for a price you can afford, is a vital part of the pre-planning.

Also, if you are planning a single-storey extension, consider opting for a two storey extension instead to reduce your costs per square metre.

Designing a Cost-Effective Extension

£40k extension to semi-detached house

These homeowners extended their home with a flat roof design that extends to the side and rear of their home, sticking to their budget of £40,000

Do You Need to Extend?

Firstly, ask yourself if an extension is as cost-effective as repurposing existing space that’s under-used. A seldom-used garage or loft space, for example, will be cheaper to convert and give you valuable extra living or utility space for a fraction of the cost of a new extension. 

Choose a Simple Design

If you do decide that an extension is the best solution for adding valuable space, then sticking to a simple configuration – a rectangle with a pitched roof, for example – will work out cheaper than a more complicated design. Similarly, the simpler the building materials and interior fittings are, and the easier they are to install, the more affordable the project will be overall.

Choose Standard Materials, Fixtures and Fittings

This may well rule out non-standard, made-to-order doors and windows, and will almost certainly mean you opt for cast concrete sub-floors and concrete blockwork for walls, or choose roof lights over dormer windows – but doing so will reduce your costs considerably.

Don’t be lured by fashionable brands when more affordable own-brands or DIY-store products will do the job just as well. Dulux paint, for example, will do as good a job, if not better than expensive, trendy paints that cost twice the price, while DIY-store Metro-style tiles are indistinguishable from those of boutique brands once they’re on the wall.

Consider Positions and Placements Carefully

Simplifying the groundworks will help reduce costs, too. This might mean opting to site your extension away from trees, drains, sewers or other buried services – assuming, that is, you have the space to be choosy.

Consider the position of fittings inside the new extension, too. If, for example, a new toilet can be sited near an existing soil stack rather than at a distance from it, you’ll save on labour and material costs.

Stick to Your Plans to Keep Costs Down

Carefully planning the design of your extension, right down to the specification and position of the light sockets, will save you money on making costly changes later on when the build has already started.

Sticking to those design details as closely as possible will keep costs under control, as changes always incur a charge.

If you do have to alter your plans here and there, always agree the fee up front with your builder. Keep an itemised running budget and an order of works as the extension proceeds – this will help you keep track, see where you’ve made savings and where you’ve over-spent.

Orangery extension

Anglian Home Improvements was commissioned by these homeowners to add an orangery to create the perfect indoor/outdoor space. An orangery from Anglian Home Improvements costs from £18,000 for design, materials and installation

Reduce Waste to Reduce Costs

Mistakes cost money – but you can avoid or at least minimise them by having accurate scaled plans in place before work starts. This will mean you don’t over-order on materials, and it will prevent work having to be undone and redone. Measuring everything on site, rather than off your plans, can also help reduce wastage.

Re-use Materials

Working out if you can re-use existing materials should be very much part of the extension design planning process. This might be as drastic as repurposing your existing kitchen as fittings for the new utility room in a kitchen extension; or, perhaps you can refinish and re-lay old floorboards.

Sell What You Don’t Need

If you can’t re-use existing materials – from door furniture to kitchen units – sell or trade them rather than letting your builders put them on a skip. Reducing skip usage means lower skip hire costs. Really looking to trim costs? As a private householder, don’t forget that you can use your council tip for free, too.

Be a Savvy Shopper

When it comes to buying items from new, looking for end-of-line materials – from tiles to kitchen units – can save a fortune; just ensure you’re spot on with the order.

Another way to save is to buy reclaimed materials, including bricks and roof tiles, kitchen units and fire surrounds, from private sellers on the internet or from salvage yards. The upside? You can grab yourself some real bargains, and these individual finds are likely to add bags more character to your new extension, too.

Be Your Own Project Manager

If you have the time – and it does take lots of it – project managing the building work yourself will save you the fee your builder will charge to cover their time – usually 15-25% of the total cost of labour and materials.

If you are project managing – or buying materials yourself – it’s worth finding out where your local trades shop and try to get those wholesale/trade prices yourself.

Bulk-buying from one supplier is a good opportunity to ask for a further discount, and a reduction on delivery costs, too. Paying in cash for materials – perhaps you’ve found a one-off piece online that you love – allows you to negotiate a discount, too (but make sure you get a receipt).

Save on VAT

If you take on self-employed tradespeople who turn over less than the VAT threshold, you won’t be charged this tax, making your labour costs lower. Bear in mind, too, that some renovation works, such as upgrading your home’s insulation or building an extension on a house that’s been empty for two years or more, can be done at a reduced VAT rate.

Save on Fees

There are various fees associated with building an extension – from party wall agreements to architects’ charges to building control costs – but there are ways to cut back on these.

Party Walls

If your build is on or near the boundary with your neighbours, or if the work necessitates, for example, an RSJ being supported by the party wall, you will need to comply with the party wall act.

If you have a good relationship with your neighbours, and can reassure them about the work you are planning, they may agree to sign a party wall agreement. Doing so will save on the cost of a party wall settlement, which can cost upwards of £1,000, more if next door wants to hire their own independent surveyors – at your expense – something they’re well within their rights to do.

Start by talking to your neighbours and showing them your extension drawings. Then, you need to notify them in writing eight weeks before you start; if they agree to write back to say they do not object or to fill in a waiver form, you can avoid using a party wall surveyor – and the cost this incurs.

£40k oak frame extension to a Welsh farmhouse

These homeowners chose Welsh Oak Frame when it came to adding extra space to their Welsh farmhouse. The extension cost £40,000

Planning Application Fees

Planning fees are another cost that you can trim back on. If you or your architectural technician/architect can design an extension that falls within permitted development rights, no planning application will be needed, saving on the cost of planning fees.

Equally, if you ensure the design of a larger extension that falls outside permitted development will be acceptable to your local planning department before you apply for permission, you’ll save on the cost of repeated applications.

You can do this simply by picking an extension design that’s sympathetic to others in your local area, or by having an informal chat with your council’s officers to gauge their opinion.

Comply with Building Regulations

Building regulations must be complied with and, while you can’t avoid building control fees, you can ensure that your extension is compliant with both the regulations and the planning laws. Flaut them and the work will have to be undone and corrected at your expense. This is just one reason why it’s worth hiring a good, knowledgable team – but even then it’s worth double-checking yourself.

Choose Those with Experience in Budget Projects

When scouting about for an architect, architectural technician, surveyor or structural engineer, ask about their track record for designing low-cost projects – then check if they can produce planning and building regulations drawings for a fixed price.

To find the right people in your area, search the Royal Institute of British Architects database, Chartered Institute of Architectural Technologists, Royal Institution of Chartered Surveyors and The Institution of Structural Engineers.

Finding the Right Builder

Choosing the best builder for the job is the one thing that’s going to have the biggest impact on your budget. Ensuring your builder or tradespeople (and therefore, you) do not underestimate the costs your extension is going to incur is vital.

The best way to avoid this is to employ competent, experienced people with good references that you can check thoroughly – remembering to ask questions about how well they stuck to the budget set, and whether cost over-runs were down to situations they could have avoided.

Never pay for building work in advance; rather, agree staged payments in advance that are in line with the work completed and the materials used – and only make the payments when you have checked the work and are happy it has been completed as agreed.

This will be easier for you if you are keeping an itemised budget as mentioned above, whether or not you are project managing.


Lucy Searle is Editor-in-Chief at RealHomes.com

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