How To Deal With Rising Renovation Costs And Delays
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Over the past year, the renovation community has been hit by material and labour shortages as well as a surge in overall construction costs.
Not only has this made it more challenging to plan your project, many renovators have thought to have paid around 15-20% more than they would have the previous year.
With uncertain times ahead, we look at how to plan your renovation in 2023 and keep the whole process as smooth as possible.
If you are thinking about a renovation in the near future and need some help with where to start with your project, try our renovation advice session.
Renovation Advice Session
What's caused the current renovation issues?
A combination of an increased demand on materials and a shortage of both skilled labour and HGV drivers have caused a surge in construction costs as well as long delays to projects.
Many basic construction materials such as concrete, tiles, steel and timber have been in huge demand which has caused construction prices to surge. The transportation issues have added to the delays and shortages of materials, further exacerbating the problem.
With many skilled trades no longer available in the UK following Brexit, and Covid cases causing trades to be off work for extended periods, the labour lead times and rates have gone up too.
According to the Federation of Master Builders, 89% of builders have faced delays in 2021 due to either materials or skills shortages and 97% have faced material price rises.
What can you do about the rising prices and long delays?
It's understandable that you are still eager to carry on with your renovation project. For many, there is a need to increase the size of your home to accommodate a growing family. Or your newly bought home could be in such a state of disrepair that you need to renovate to make it habitable.
There are some things that you can do to take the pressure off and try to mitigate the rising prices.
1. Make sure you have a large contingency budget
Although a decent contingency budget won't help you save on the rising costs, it will help you cover any price hikes.
We currently recommend a contingency budget of around 15-20% of the construction costs. Your contingency should be used not only for unforeseen structural, site issues or weather delays but to cover unforeseen price rises.
If your budget will only cover the renovation itself and not stretch to a contingency, then it's unwise to start your renovation project in the current climate.
2. Plan well and give yourself long lead times
Reputable builders can have lead times of up to one year in the current climate. Construction materials can also take several months to arrive, as well as kitchen, flooring and other interior products. It's therefore so important to be well planned.
Although a builder won't provide a quote until you have structural plans, it's worth getting recommendations and speaking to a few whilst your architect is drawing up the designs. That way you will have shortlisted your builders and understand their availability which you can factor into your plans.
In terms of products, knowing the lead times of those that you have chosen will help ensure they are ordered in adequate time for your builder. Choosing products like kitchens, windows and flooring early on will help your builder avoid further delays.
Once your builders have started they will be able to order the materials as best they can to arrive on time.
3. Be flexible
Of course there are many things that you have dreamt of that will feature in your renovated home, but right now you may have to be flexible to keep your project within budget and on time as best you can.
For example, the architect may have included a glazed ceiling above your side return extension, however several roof lights might be a more affordable option when it comes to the actual build. Chat to your architect on ways to save on your renovation should the prices start to rise.
Certain types of roof tiles may be taking longer to order than others, so choosing a different manufacturer may speed up the process.
It might be that a particular flooring that you liked must be shipped from outside of the UK, so looking for alternatives that are more local may help reduce the lead times and cost.
4. Consider what you can delay
There may be parts of your project that you can delay until you have the budget or when the prices come back in line. This could be things such as rendering or cladding the exterior which wouldn't impact how you live in your home day to day.
Alternatively you may want to split your project into phases to ensure it's within budget.
5. Work together with your builder
As challenging as the current environment is for renovators, it's also extremely hard for builders with many businesses finding it unsustainable.
Builders are struggling to find skilled tradespeople and those that are available are charging higher rates. Furthermore, the impact of material delays is causing jobs to be cancelled or significantly delayed.
Your builder might be able to recommend working on another project whilst they are waiting for a particular labourer or know of alternative products and suppliers that you can choose. They may be able to bulk buy some materials at the outset, therefore locking in the price.
Keeping in close contact with them so that they notify you of any additional price rises too.
6. Don't choose a builder that you are not happy with in order to progress
It's understandable that you would like to push on with your project however don't do it at the expense of the quality of the workmanship.
You may find that less experienced tradespeople have more availability, however make sure you work with a builder who has the experience that you need, even if it means delaying your project by several months. Poor quality building work may mean you have to spend more in the future to fix mistakes.
7. Factor in additional time
Knowing from the outset that your preferred builder may not be available for one year will manage your expectations.
It's also sensible to expect delivery delays which will impact your project timescales. Being prepared for these will mean you won't feel as frustrated when they happen and your project overruns.
Who bears the brunt of rising costs, is it me or my builder?
This is very dependent on your contract with your builder and how long the pricing is valid.
"It’s got to the point now where we can no longer state how long our estimates are valid for," says Chris Shaw from EveryTrade Construction.
"A week doesn’t go by where we don’t get a letter from our suppliers regarding rising material costs. To compound the issue, labour prices have also risen because there is so much demand for skills. This has put us in a difficult position because we book up so far in advance we’re left with a moral dilemma…do we abort the price rises or pass them onto our customers? We’ve decided to take the rises on the chin but it’s made the last few months pretty challenging!"
However, many of the price rises will impact you before you even start to work with your builder. For example, architectural glazing that was included in your architect's plans might be unaffordable by the time you start working with your builder. The steel price may increase from when your architect's estimated the price. At this stage, you will know what you are going into and what trade offs you will need to make to meet your initial budget.
Should you consider delaying your project?
Many renovators are considering delaying their projects due to the current issues.
With the initial planning process taking anything from several months to a year, there is no reason why you can't carry on with this phase of the project. Planning permission is also valid for three years, so making sure you are happy with the design and submitting your planning application could be a good use of time.
With no sign of the current issues changing in the short term, you may want to carry on with your project if you have the budget and contingency in place.
If you are thinking about a renovation in the near future and need some help with where to start with your project, try our renovation advice session.
Renovation Advice Session
Published: September 29, 2022
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