A home extension is a big financial investment but it can pay dividends. To come up with a budget for your project you will need to research and plan down to the last detail

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Working out how much an extension will cost is not straightforward. You may have a figure in mind but does it bear scrutiny? These top tips will help you devise a budget that stands up to the reality of material and labour costs, hidden expenditure and the financial implications of things going wrong.

Sense check your design

Is your design the best use of space and will it truly improve your home?

Is a single storey the best option or would the extra expense of a double height extension pay off?

If it won’t be easy for contractors to access the site or for materials to be delivered, what additional costs will be involved?

Will you be able to live in the property while the work is carried out? If not, how much will it cost to live elsewhere?

Be realistic about your financial options

Not many people can pay for an extension from savings and chances are you will need to take out a personal loan. Work out the interest you will be paying and factor this into your budget.

Is remortgaging an option? Would this allow you to pay off the original mortgage and leave enough money to pay for the extension?

If it doesn’t, would a stage repayment mortgage be suitable? A stage repayment mortgage releases funds at the beginning of key stages of a building project so that you have money when you need it.

Price everything and test it

Talk to industry professionals and suppliers and to friends who have built their own extensions to make sure your budget is practical and realistic.

Create a spreadsheet, add every element of your extension and its cost. As well as labour costs include legal fees for planning permission, appliances, decorating and landscaping. As well as costs for main materials, include sundries such as grout, adhesive and sealant. Use online calculators for kitchens and bathrooms.

Factor in a contingency

Building projects can be unpredictable. Set aside extra money in case things go wrong. The usual recommended minimum is 10% of the budget, but if you start with 15% you can reduce it as you go.

Draw up a contract

Create a brief and drawings for the job and get a contract for domestic projects from the Royal Institute of British Architects. Make sure a specification or detailed drawings are part of the contract between you and your builder.

Minimise delays and expensive mistakes by including materials and timings of each phase of the build in your specifications for the builder.

Stick to your plan and to your budget

Don’t be diverted from your course. Trust your decisions. Last minute changes or temptations to upgrade can be costly unless you can recoup the expense elsewhere without impacting the overall project.

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