How to Budget For Your House Build and Spot Hidden Costs
For most people, building a home is a once-in-a-lifetime opportunity, making it essential to manage your budget carefully. While building your own home can be a cost-effective way to get the most for your money, it’s important to be smart about creating your budget. Thoughtful planning will keep you on track and help you avoid unforeseen expenses.
Budgeting to build your home
Whether you’re creating your forever home or plan to move in a few years, all self-builders share one key question: ‘How much will my house cost to build?’
This is the number one question the Coldwells Build team are asked, but the truth is - there’s no such thing as an average build cost, because factors such as ground conditions, access to the site, location and proximity of services all have an impact on cost.
There’s also a big difference between building a one-off, architect-designed home and a pre-designed, prefabricated Coldwells Build Passivhaus. Each option involves different construction methods, materials, fixtures and fittings.
Ultimately, the definitive answer really depends on your construction budget, which is the amount you can spend to build your home.
Work out your construction budget
Firstly, decide how much you can reasonably afford. To calculate this, consider the following:
– Your total savings
– Equity from the sale of your home (if required)
– Financial assistance via a self-build mortgage (if required). An advisor will let you know the amount you can borrow.
Add these together and you’ll have your overall budget. From here, there will be some initial expenses:
Land Costs
Buying a building plot is the first important step. You can get an idea of land costs with a bit of research. Local estate agents advertise land for sale and you can also search online using websites dedicated to self-build land listings. Remember to factor in legal fees and taxes.
Professional Costs
If you’re building a bespoke home, a portion of your overall budget will need to cover hiring professionals like an architect, engineer and a quantity surveyor. However, if you choose to build a Coldwells Build Passivhaus, we offer all these services in-house, simplifying the process and potentially saving you time and money.
Accommodation Costs
Factor in the cost of where you will live for the duration of the project. Can you stay on the site in a caravan, which you may have to buy, or will you need to rent somewhere to live?
Contingency Fund
If you're building a bespoke home, it's wise to set aside a contingency fund for unexpected expenses. A typical allowance is 15-20%, but consider your options carefully—what would you do if more funds were needed?
When building a Coldwells Build Passivhaus, a smaller contingency fund is usually sufficient. One of the advantages of choosing a pre-designed, prefabricated home is that many components have already been assembled in previous projects, making the costs and details much more predictable.
Once you know all of the above costs, subtract these from your overall budget – the total amount you can spend to build your home.
Align your budget with your brief
Once you’ve worked out your construction budget, it’s crucial that the design of your home reflects this figure. This is where you need to be realistic. If you're designing a bespoke home, ask yourself, do you really need five bedrooms if your children no longer live with you?
It can be easy to get carried away with ambitious design concepts, but later on, when you approach contractors for quotes, you may discover the construction costs are beyond what you want to spend (or can reasonably afford).
To avoid this, we recommend you work with an architect who collaborates with a contractor in the design phase to provide cost visibility from the start.
The architect manages the design, and the contractor and architect work together on construction costs. When construction costs are monitored and tracked in the design phase, the risk of budget blowouts decreases. It’s also an opportunity to identify any construction related challenges early on. With practical input from the contractor, potential issues can be ‘designed out’ before leaving the architect’s desk, saving time on rework at a later (and more costly) stage.
If you’re building a Coldwells Build Passivhaus, our in-house quantity surveyor will conduct cost checks at three key stages of the process. This ensures the project stays within your budget, allowing you to plan with total confidence.
How to spot hidden costs
Here are some hidden costs to look out for that will affect your budget
Remote Locations
The location of your building plot can impact the overall project cost, especially if you're in remote areas like Scottish islands. In places like these, contractors may not be readily available, meaning they have to travel long distances to reach your site. This adds to the costs due to accommodation and travel and ferry expenses.
While it might be your dream location, if your budget doesn’t align with the realities of building there, you may need to reconsider your plans or look at increasing your budget.
Sloped Sites
Sloped sites are notorious budget busters, often demanding a split-level home, or extra digging, filling and levelling. It’s worth getting a topographical survey to make informed decisions on house position, access and the amount of groundworks required. If you’re building a Coldwells Build Passivhaus, this is included in our service.
Ground Conditions
The biggest cost uncertainties often lie beneath the surface of your plot. If you’re building a Coldwells Build Passivhaus, our service includes a complete site assessment, so you have a clear idea of the ground conditions.
Extremely boggy or rocky ground could bump up costs. A boggy site could lead to drainage issues and may require deeper excavation and filling with imported hardcore. Larger rocks will need breaking up and any surplus removed from site.
If you’ve found a site you want to buy, make sure to include a condition in your offer that lets you assess the ground conditions before finalising the purchase. This way, if the conditions are unsuitable for development, you'll have the option to withdraw from the purchase or renegotiate the price.
Site Access
Make sure your plot has suitable vehicle and construction access. For example, a steep track could hinder the delivery of a Coldwells Build Passivhaus, as we use a large crane to lift and assemble prefabricated panels. Buying a cheap site that needs a long access road worth £40,000 can be a false economy. A level access road over a short distance is more economical. If you’re building a Coldwells Build Passivhaus, we’ll provide a quote for putting in access roads and clearing the site.
Connection to Services
The availability of services like water, electricity and telecoms/broadband can affect the cost of developing a building plot. If your chosen site isn’t already hooked up to these services, it will cost extra to extend existing connections or install new ones. In rural areas, you might need to invest in a private septic tank or treatment plant if you can't connect to a mains sewerage system. If you’re building a Coldwells Build Passivhaus, we’ll obtain quotes from utility companies for service connections.
Demolition, Asbestos and Contaminated Land
If you’ve bought an existing building, will it need to be demolished before your new home can be built? If so, this will need to be factored into the cost, along with skip hire and removing waste from site. If asbestos is present, a specialist contractor will be required to remove this safely. Similarly, if you're building on land previously used for agriculture or industry, there may be contaminated ground. This requires safely removing and disposing of the contaminated soil.
Understand how spec impacts on price
The cost of building a bespoke home is influenced by a variety of different factors, but the quality of materials you finish your home with (the specification) will have the biggest impact on price.
When booking a hotel, we generally understand how the star rating correlates to the cost. It’s the same when you’re building a home. A standard-spec finish (3 stars) with off-the-shelf laminate flooring, basic MDF skirting boards and window sills, and standard lighting fixtures are budget friendly.
High-spec luxurious finishes (5 stars), such as solid wooden flooring, natural stone tiles and custom-built cabinetry will add a unique look to your home, but also increase the cost.
If you're building a pre-designed, prefabricated Coldwells Build Passivhaus, you’ll benefit from greater cost certainty. Working with Scotland's top design talent, we’ve sourced and specified high-quality interior products, including kitchens, bathrooms, flooring, stairs, lighting, and doors. With a clear specification in place, we can provide a fixed price for our Passivhaus homes.
How to keep costs down on building project
Choose a Pre-designed Home
Building a bespoke home is complex. From hiring architects and contractors to design choices, material selections and layout decisions. For busy people, it’s a big commitment.
A great way to streamline the process is to opt for a pre-designed prefabricated home like the Coldwells Build Passivhaus. Our ready-to-go homes are constructed off-site, saving you both time and money compared to custom builds. You’ll skip the added expenses of custom components while still living in the world’s best energy-efficient home.
Phase Your Project
You don't have to finish everything at once—consider phasing your project to spread out costs. For example, you could add the garage later or start with simple landscaping and add more features over time. You can also plan for future upgrades, like solar panels, by installing the necessary wiring now. This approach allows you to move into your home sooner, while making improvements gradually as your budget permits.
Stick to Your Plans
One area that is vital for keeping control of your costs is to stick to your design. Changing things on site can be expensive, especially if you have to keep altering completed work.
Build a Future-proof Home
While it may cost around 4-8% more initially to build a Passivhaus, investing in a well-planned, extremely energy-efficient home will yield long-term savings on heating bills and maintenance expenses.
Final Thoughts
Building your own home could potentially yield significant returns. A well-considered project could potentially net you a profit when (or if) you come to sell.
Coldwells Build manages a limited number of building projects each year, so our clients are guaranteed the highest level of quality. If you have a deadline in mind, start the discussion far in advance.
Take advantage of our willingness to share knowledge about the building process and schedule a strategy conversation today.