Cost Clarity - How to Know

The biggest anxiety when beginning any project is cost. Horror stories abound of projects going catastrophically over budget. It is the stuff of nightmares.

Indeed, many of the enquiries HebHomes receives are from people who have experienced their very own project “bad dream”. An architect’s vision and a client’s dream have run ahead of reality, and the brutal truth about cost has only been properly understood after many tens of thousands of pounds have already been spent.

At HebHomes, we are upfront about costs so that this scenario is avoided. It is impossible to have certainty on costs until a project has been fully detailed and engineered and a fixed-price contract has been signed. However, it is certainly possible to reduce uncertainty as much as possible at the very beginning.

If you are told by a contractor or another kit house company that your house will cost a specific amount when you only have a sketch design or outline plans, you are not being told the truth. Red flags and alarm bells should ring. There is so much about building a house that is unknown at this stage. It is not like buying a car. Every house is unique because every site is unique.

It is not just size and specification that determine the cost of a house, as they would with a car. Cost is driven by the procurement method, the location, and — most importantly — the site itself.

If you have bought a site on a remote island, or a restricted urban plot with complex access, the cost of the build could vary hugely.

If your site is in a part of the country where there are few, if any, local contractors, and outside contractors are required, then preliminaries — the overhead costs for accommodation, travel, and subsistence — can have a significant impact on overall cost.

Likewise, if a location is so remote that outside contractors would prefer not to build there (because there is plenty of work closer to home), then expect to pay a premium. Similarly, in parts of the country where there is a shortage of skilled tradespeople and high wages — the South East of England or the Channel Islands, for example — expect labour rates to be higher and overall costs to rise.

A useful way to think about build cost is this. Imagine, for ease of understanding, that a house takes one year to build. Presume that, on average, three skilled tradespeople are on site throughout that year. If each earns £80,000, that is £240,000 in labour costs alone. That figure includes no materials, no overheads, and no contractor profit.

This is a simplified example, but it illustrates why building a house is expensive. There is a huge shortage of skilled labour in the UK. This is partly due to Brexit, but also because younger people have not entered the trades in sufficient numbers. Older, highly skilled tradespeople are in great demand, which drives wage inflation at the top end.

In rural areas, tradespeople are often among the best-paid members of the local community — and if they have valuable skills and are in demand, that is entirely understandable.

Building regulations have also had a major impact on the cost of construction. This is not simply because tradespeople were previously underpaid, but because the fabric and technology required in a modern home is night and day compared to previous decades — and continues to improve.

In the early 2000s, a house could be built with a 100mm timber stud, mineral wool insulation, and electric storage heating. Today, the equivalent house would typically require 300–400mm of insulation, air-source heat pumps, mechanical ventilation with heat recovery (MVHR), and often solar panels to achieve the energy performance demanded by current regulations. This is expensive.

Any modern house that is built is therefore expensive. It cannot cheat the building regulations. You get what you pay for, and what you should get is a home that is vastly superior in quality to much of the existing housing stock.

So, if you are going to build, accept that it will cost you a significant amount of money. However, in the view of HebHomes, there is little point spending that money unless you also get a great piece of architecture.

You should not choose a home solely on the basis of square footage and room numbers, but on architectural quality — volume, space, delight, and joy. Is it a wonderful experience simply to be in your home?

This brings us back to cost. With HebHomes, you will pay for that amazing double-height space and those fabulous windows. You will also pay for the exceptional performance of our buildings. But you need to know — as far as possible at the beginning — how much that is likely to cost.

Our pricing tool answers that question as accurately as we believe is possible at the very start of the process. You can choose a house design and see an estimate for the supply and erection of the kit.

From there, there is a choice of procurement options. What most people initially want is a turnkey build, delivered by one of HebHomes’ affiliated contractors or a trusted local contractor. This is the easiest option. However, if the figure is already well over your budget, you need to pause and think again.

HebHomes is not telling you what you want to hear — which many companies unfortunately do at this early stage — but what is realistic. Being realistic is imperative if you want to avoid stress and anxiety and having your dreams shattered later.

There are, however, other options. Organising trades yourself can reduce total construction costs by around 25%. Undertaking extensive DIY can reduce costs by up to 50% compared to using a main contractor. HebHomes will provide guidance and support if you choose these routes.

This approach has traditionally helped young people — using friends, family, and their own labour — to build their homes and pursue their dreams. It is also an ideal route for those within the industry or those with strong project management and organisational skills.

Location provides another important reality check. If you own land in a remote location or in an expensive part of the country, expect to pay more — sometimes a lot more. If you buy land on an island off the west coast of Scotland, costs can rise dramatically. It is essential to understand this before buying.

The plot itself is equally critical. It cannot be over-emphasised how much the nature of the land impacts cost. Long access roads, steep ground, soft peat, hard rock, and lack of water or electricity can all sink budgets. Investigate these issues before committing to a site. HebHomes can help you do this.

Specification choices also affect cost. You can reduce spending on flooring, kitchens, bathrooms, and tiling to save money. However, these savings are often insignificant compared to the impact of location and site conditions.

Building your own house is probably one of the best things you will ever do. It should be an enjoyable experience. Being realistic and prepared about potential costs will prevent the nightmare scenarios that are legendary in the industry.

HebHomes is here to guide you through these challenges, including introductions to lenders, brokers, quantity surveyors, and contractors. There is only so much anyone can do in construction, but we will do our best to prepare you properly and support you through the journey. Listen to advice, and remember that costs are never fully certain in construction.

But remember the prize.

A stunning house of remarkable architectural and built quality — a home that will only become more valuable as existing housing stock continues to age and fall behind modern standards.

It is worth spending the money.

Just make sure you have enough.