Great design is useless if you can’t afford to build it: managing architectural project costs

Most people think architectural services end at the design, but for me, the design is only part of the job. The other part of the job is protecting the client’s bottom line and managing architectural project costs. Fears of cost overruns is a real and big issue. This is especially relevant as the supply only cost of materials over the last few years has sky rocketed.

Cost Estimate Summary Example

Surely there is a way to manage costs, or a way to control costs, so the money horror stories you hear about from your friends and family or see on the TV, don’t become your reality. Fear not my financial savvy friends, there is a way.

Charity Coffee Shop Retrofit Project

Your costs can be managed properly so your core requirements are delivered and actually built. Carry on reading to find out how I keep my client’s project costs on track from day one.

Managing architectural project costs is just as important as the design itself

Costs are a big constraint to any project and understanding how to manage the costs while still delivering the client brief is something that can be quite difficult to actually achieve in reality. I’ve pulled together some real life tips on how to achieve this, using tried and tested methods learnt over the years. Carry on reading to find out more. 💡

A client’s budget needs to be grappled with early on in every project. During my very first conversation with new clients, we are talking about project costs and how to ensure their project can be delivered on budget. One of my first questions is around budget. What is your budget? Does that include VAT and professional fees as well?

I always try to encourage clients to get cost estimates applied at early stages so the design can be sense checked against realistic market rate costs. Most, if not all of my clients, are often surprised at how much things cost to get built properly and cost savings are usually made throughout the life of the project. If you are embarking on a building project please try to ensure that you are considering realistic costs very early on, before you get too attached to a design that you love, but is simply unaffordable. Try not to ignore the advice of your professionals, after all, this is what you are paying them for [what a crazy notion right, this can’t ever happen].

Enter the esoteric Quantity Surveyor

To help with controlling project costs we often work side by side with another building professional called a Quantity Surveyor or QS. A QS can do many magical things but in the context of cost control, they possess expert knowledge about building costs and can prepare documents that itemise the building work into logical sections that are each priced up to current market rates. This document is called a Cost Estimate and takes into account the quantities and costs of each building component, such as number of items [say 12 timber framed windows], areas [say 47m² of fireboard] and volumes [say 17m³ of concrete], etc. When all these components are allowed for and totalled up this generates the total cost of the building work. There is a lot more to it than that but hopefully you get the idea. If you are employing a QS to help with your project before getting a Building Contractor involved you will need to pay a professional fee for this service. It’s worth noting that Building Contractors often employ a QS to help them prepare their quotes for new projects which demonstrates how effective they are at helping with project costings.

Here’s the 4 phase process I often follow for controlling costs on Client projects, the design is usually amended at each stage to reduce or manage costs.

Before Planning Permission – Cost Estimate 1

Early costs are obtained from a Quantity Surveyor, once a preliminary design scheme is agreed, before Planning Permission is applied for. This is sometimes called RIBA Stage 2. This means the design can be amended to save costs, before submitting for Planning Permission. Sometimes the project is cancelled at this early stage, as the costs are too high.

Note: Stage 2 costs are based on a lot of assumptions, the final specification and final build ups of floors, walls and roofs etc. have not been fully worked out at this stage. This means Stage 2 costs can sometimes vary from Stage 4 costs. Stage 2 costs should only be used as an outline guide price, not a definite, detailed Cost Estimate.

Stage 2 drawing – basic level of information shown

After Building Regulations – Cost Estimate 2

A bit later on, get the previous costs updated from the Quantity Surveyor, once the technical design has been completed, soon after Building Regulations has been submitted. This is sometimes called RIBA Stage 4. This means the design can be further amended to save costs, before obtaining prices from Building Contractors.

Another note: Stage 4 costs are usually higher than Stage 2 as the technical detail and specific calculations have been properly worked out, Stage 2 cost estimates should not be used for direct comparisions against Stage 4 Cost Estimates or Building Contractor’s quotes as they will be invariably different as already explained.

Stage 4 drawing – updated with loads of technical design and information

Before construction – Cost Estimate 3 / Tender stage

We then obtain accurate prices from Building Contractors for the updated design. If the costs are acceptable we proceed to get things built for this cost. This is sometimes called RIBA Stage 5.

Before construction – Cost Estimate 4

If the costs are still too high we then accept the cost estimate from the Building Contractor who is the best fit for the project [not always the cheapest] and work together as a team to agree a final round of cost savings. Once these cost savings are agreed and the project is in line with the Client budget we proceed to get things built for this cost. This is sometimes called RIBA Stage 5.

At this point, you need to focus [ruthlessly] on the luxury ‘nice to have’ items vs the essential non negotiable items. i.e. new handmade, handpainted artisan timber kitchen vs new decent kitchen from a regular supplier that could be over £15k cheaper.

Occasionally, at this stage some Clients decide to pull out and do not proceed any further, their project is not built. While this is disappointing and frustrating it is a lot better than the alternative of starting a project on site you can’t afford to finish off or that needs a late redesign, sometimes after building work starts.

The image above is of a Green Belt project that was abandoned after receiving building contractor quotes. So, while this family did spend a lot of money on professional fees, the cost of these fees was a lot less than the potential cost of a building project that was unaffordable, and the emotional stress of having to deal with that, was eliminated.

The process above isn’t the quickest and I recognise this isn’t always possible or suitable on certain projects. However, this process does work and provides assurance to my Clients that their project is going to be delivered on budget. There are no unexpected surprises towards the end of a project.

I have to admit, I didn’t always follow this process, and I quickly learnt the hard way that waiting until costs are provided by Building Contractors at a late stage is not the best way of managing architectural project costs. In the past, this approach sometimes meant that a Client’s ideal project and the Client’s dream wish list came in above budget. Amending the design at a late stage to reduce costs can sometimes mean that Planning Permission and other approvals need to be amended or fresh approvals are needed. This can then delay a project. You need to adjust the design along the way, to save costs before it’s too late.

There are also other ways to obtain costs, but they don’t always produce the best results, in my opinion.

During construction

If appointed for project management services on site I can also help manage costs during the build phase. During construction I also work collaboratively with the Building Contractor to see if there are other ways to save costs without reducing performance. There is also another tried and tested method I use during construction that generates a staged paper trail along the way so everyone knows exactly how the project costs are going at any particular time and there are no surprises at the end. I think I will write another Newsletter about this in the future, for another day.

If you try to get a grip on your project costs early on and keep reviewing them regularly, this should mean that you don’t have to put up with a part-finished project on site that you can’t occupy and enjoy. You should always have a good and real understanding of how much things are costing you at all times.

Yet another note: detailed designs and drawings are essential for accurate prices and overall project success. This is something I try hard to do and I like to think I help deliver with this. My designs and drawings are very thorough and detailed, without any second guessing. This means working with my drawings should mean pricing is accurate + the work is quicker and easier to build on site. There is more Client certainty and less figuring stuff out on site as you go along, so to speak. I try to get everything absolutely nailed down before building works start. In fact this is a key component of my core business values.