Building costs have soared since 2020 - so what can you build for your budget?

Budgets can make or break a project whether you’ve got £25,000 or £700,000 to spend. Before you get carried away drawing up plans for that dream extension you’ve always wanted, it’s vital to work out roughly what you can afford to spend without going bankrupt. Whether you’re going to expand an existing room, add a new one or even an extra floor, everything comes down to the size of your budget and that’s before you even consider optional extras like designer kitchens or bespoke glazing.

Get builders’ estimates

A good way to figure out what you can build for your budget is to talk to a local builder rather than a designer. They can suggest different solutions. And, crucially, they will be able to give you an idea of what different projects might cost. If this is more than you can afford, then you will need to rethink. “Get a budget estimate before you even speak to an architect and get any drawings done,” says Grant Harrison, MD of Hampshire-based Majengo building company. A board member of the Federation of Master Builders (southern counties), Harrison has helped hundreds of homeowners to extend their homes.

Most people “don’t have a clue” what it costs to build an extension or loft conversion said Harrison. “It’s best to go to a builder for a budget estimate because architects are often out of touch on costs as prices are going up so fast. I prefer to tell a client what they need to budget for a project and then refer them to a local architect. Often, they find it costs way more than they expected and don’t have enough money, so shelve their plans at this stage.”

What’s the difference between an estimate and a quote?

An estimate is basically a contractor’s guess what your project will cost based on limited information. It’s not legally binding and the final bill may be a lot higher. Whereas a quotation is a definite price.  When you start working with professionals, including a builder, architect and structural engineer, you will be able to get a more detailed quote specific to your project based on their input.

Always get quotes from three different builders to compare. Beware a quote that is a lot cheaper than the others.  If it looks too good to be true, it probably is. The Federation of Master Builders (FMB) is campaigning for the mandatory licensing of construction companies to protect homeowners from cowboy builders who do shoddy work. Currently, anyone can call themselves a builder without having any qualifications or experience. That’s why is so important to carefully choose your builder

Speak to a local architect

A good local architect will also be frank from the start and tell you if your budget is realistic for what you want to achieve. They will factor in what you have available to spend and extra expenses you may not have considered, such as ground works. Unlike builders, architects are trained design professionals, so may come up with creative ways of making your budget stretch a bit further. For instance, you may be able to achieve the extra space and light you require by knocking down dividing walls and going open plan. Rejigging the ground floor layout is often a cheaper option than building a new extension.

The initial architect’s consultation is usually free. Don’t be fooled by TV shows like Grand Designs. It’s not good TV if something doesn’t go wrong but at most a project shouldn’t go over budget by more than 15% said Harrison.

Understand building costs

While local builders and architects can give expert advice, it’s still useful to have some ballpark figures at the start. Be aware these costs will vary depending on where you live in the UK and overall quality of build. In the south-east, the rule of thumb is now £2,200 to £2,800 per m2 for a basic to mid-range extension, according to Harrison (prices November, 2022). In London, this rises to £3,500 to £6,000 per m2 . So, if you’re in the south-east, the average cost of the basic shell of a 16m2 extension is £35,200 to £44,800, excluding VAT, according to Harrison. This covers build costs only and none of the interior fittings. Elsewhere in the UK, building costs tend to be lower.

Of course, this is only a very rough estimate. The price tag will vary enormously depending on the quality of build (basic, mid-range or excellent) and big-ticket items. Glazing can have a major impact on costs. Bi-folding glass doors cost more than fixed panes. A standard-sized, three-metre run of bifold doors costs about £4,000 – more if they are made to measure. Kitchen can vary wildly from £10,000 up to £60,00-plus. Flooring and heating will also bump up the bill.

Garage conversions

If you’ve got a property with an adjoining garage, converting it into an extra room is one of the cheapest ways to add space and value, says Harrison. For instance, creating an extra bedroom,  home office or gym. Alternatively, by knocking down dividing walls it may be possible to expand your kitchen, dining or living area. Tradeadvisor.com reckons an average garage conversion will cost £10-£20,000 plus VAT. For an 16m2 structure, this works out at a cost per m2 of £625-£1,250. Meanwhile Harrison reckons a garage conversion will set you back £22,00-£28,000, excluding interior fittings and flooring.

Loft conversions

Loft conversions are typically cheaper than extensions.  As a house already has the basic structure, builders don’t have to dig foundations or add a new roof. Basic rooflight loft conversions are the cheapest to build. They can work well if you already have a lot of usable roof space as you essentially add windows to the roof to introduce light, a staircase and flooring. Upgrade to a dormer or hip-to-gable loft conversion and the prices rise as some of the roof sloping parts are replaced with a gable window and wall. Meanwhile a Mansard loft conversion, a box-like structure built on the roof, involve the most structural work and is the priciest option.

In 2022, the average cost for a loft conversion on a semi-detached house is around £38,000, according to Checkatrade. However, costs quickly rise to £70,000-plus for more complex projects

Single storey vs double-storey extensions

Single-storey rear extensions are a popular way to create a larger, more sociable kitchen diner and can set you back anywhere from £35,000 to £80,000-plus, excluding VAT. If you opt for a pitched roof instead of a flat version the cost will rise by about 10-15%, says Harrison. He said: “If you’re on a limited budget my advice would be to keep to a basic build. Remember the interior fit and extras can massively increase the final bill, for example bathroom, kitchen, built-in cupboards and flooring.”

A two-storey structure will double the square footage for about a 50% uplift compared to a single-storey extension. This represents excellent value for money, says Harrison, though there will be more fitting out costs, so overall costs will be higher.

The price tag for an extension can vary hugely from £10,000 for a garage conversion to £100,000-plus for a two-storey extension.  Before going ahead, research the ceiling price for properties in your area – that is the maximum value. Look at what the extension will give you in terms of extra living space and at the value of properties who have already had similar work done to see how much value they have added.