If you’re setting out on an extension project, one of the first things you’ll need to establish is your budget. Follow our five top tips for pricing your extension:

1. Remember that variables will affect the cost

There are many variables that will affect the cost of your extension, such as:

  • soil type (which affects the foundations)
  • what the extension will be used for
  • how much glazing you plan to specify
  • size (it gets slightly cheaper per unit area as the size increases)
  • location — the most expensive locations are around 30 per cent more than the cheapest locations.

“Depending where you are in the UK, for a straightforward extension you should allow around £1,000–£2,000/m²,” says experienced renovator Michael Holmes. “Remember, too, that the standard of specification you choose will have an enormous influence on the build cost.” On average, an excellent finish is 40% more than a standard finish.

2. Consider your build route

Your level of involvement in the extension will influence the build costs – how you manage your project could mean a 40% variation from the cheapest route, based mainly on DIY, to the most expensive route, in which a main contractor takes on the role of project manager.

Our extension cost calculator allows you to choose one of four most common build routes:

  • Build Route A – DIY: Building on a largely DIY basis, substituting around 30% of the labour costs with DIY and employing help with the rest of the building work. Materials purchased directly.
  • Build Route B – Self managed/subcontractors: building using tradespeople hired directly. Minimal DIY involvement. Most materials are purchased directly.
  • Build Route C – Main Contractor and Subcontractors: Building using a main contractor or package supplier to complete the extension to a weathertight stage, with the remaining work being undertaken by subcontractors with most materials purchased by self builder direct from suppliers.
  • Build Route D – Main Contractor: Building using a main contractor. Building in this way requires the least involvement from the self-builder

If it’s your first house, you might well be trying to build as much space as you can afford and to fit it out as cheaply as possible, using all that youthful energy to undertake DIY and/or project management. In contrast, a retired couple might choose to build a smaller home but fit it out to a higher standard, and to let the professionals carry out all or most of the work.

3. Decide on the number of storeys

A two-storey extension will not cost much more than a single storey extension.

 A single storey extension will cost the following per m²:

  • Basic quality: £1,000 to £1,680
  • Good quality: £1,680 to £1,920
  • Excellent quality: £1,920 to £2,160.

“A two-storey extension will not cost much more per m2 because, aside from the extra interior fixtures and finishes, you are only adding walls and floor joists — a roof and foundations are required whether your extension is single or two storey,” says Michael. “Remember, balance the amount you are willing to spend on your extension with the estimated value it will add to your home.”

4. Ask for a quotation rather than an estimate

It sounds obvious, but not being clear about the difference can make a real difference to the accuracy of your pricing.

An estimate is normally a contractor’s guess as to what your extension will cost. Whether given verbally, or in writing, is not legally binding and the final bill may exceed it.

A quotation is a definite price. When deciding which builder to choose, always get written quotations from at least two firms, ideally ones that have been recommended to you. The written quotes should itemise the work to be done, provide a breakdown of costs and a total, and state whether VAT is included. When you receive the bids, check whether there are any caveats that might involve extra expense. Also, compare provisional sums for work such as foundations to make sure you are comparing like with like.

Get an accurate, bespoke build cost estimate

5. Remember to include VAT

Most extensions will be subject to VAT on labour and materials at the standard rate of 20%, especially if you use a contractor to undertake the work. If you use local tradesmen who are not VAT registered you can save the 20% VAT on their labour, but you will still have to pay VAT on materials at the standard rate.

Some extension projects are eligible for VAT relief, such as:

  • the conversion of an existing dwelling that changes the number of units (reduced rate of 5%)
  • work to listed building (zero rated)
  • work to a building that has been unoccupied for at least two years (reduced rate of 5%).

To benefit from VAT relief, if you are extending a listed building or renovating an unoccupied home, you must use a VAT registered builder — you cannot reclaim the VAT yourself.

 Use our free online extension cost calculator

This free extension cost calculator will estimate how much your extension project is likely to cost, based on the answers to such questions as where you live, the kind of extension you are interested in, how much of the work you will do yourself and the standard of work (standard, good or excellent). You’ll get an instant, accurate result as to how much your finished project should cost for a range of projects, including:

  • single and two-storey extensions
  • loft, cellar and garage conversions
  • basement extensions.

You can then fine-tune your estimate to match your needs, adding everything from a kitchen, bathroom, wetroom or staircase to bifold doors and statement windows. The extension cost calculator will also advise you on the cost of essentials, such as groundworks and utilities.

The calculator uses figures based on the latest costs for materials and labour from the Building Cost Information Service (part of the Royal Institution of Chartered Surveyors).

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