25 years ago a hugely influential government report entitled ‘Rethinking Construction’, also known as the Egan Report, was published. It looked at the how the UK construction industry could adopt efficiency measures used in other industries such as automotive and aerospace. In the time since it was published the industry has moved a long way to implement the five key drivers of change: committed leadership, focus on the customer, integrated processes and teams, a quality-driven agenda and commitment to people.
But what about the government? The government has always used construction as an accelerator and a brake for the economy thereby denying the industry the stability it needs. The decision to mothball the redevelopment of the Euston HS2 station suggests nothing has changed. The whole HS2 project, which is the ‘flagship’ ‘levelling up’ project, has suffered cut after cut and will no longer make it either to the north or central London in the near future. The Euston project has been stopped during construction and mothballed for at least the next couple of years in order to cut costs and push them into the future. The scheme, which dates from 2015, faces another redesign following one last Autumn to reduce the number of platforms. The main contractor had about 360 people working on site but many more employed at subcontractors and suppliers will have been affected. The design team was 600 strong with half of them based on site.
Euston HS2 Station image HS2
I know from experience that it isn’t possible to shave more than a single figure percentage off the cost of a project without a fundamental rethink of the design. Why has it taken 8 years to decide that the 2015 scheme is the wrong scheme? I can’t think of a more expensive way to ‘save’ money than to halt and redesign a project mid construction.
The government needs to ease up on austerity when it comes to infrastructure and treat it as investment to boost flagging growth and deliver on the ‘levelling up’ agenda.
How much does a house extension cost in London and the south east?
My analysis of actual costs for competitively tendered projects by reputable local building contractors in the south east within commuting distance of London suggests a current ‘ball park’ figure of £3,000/m2 for a single storey extension and a further £2,000/m2 where there is a second storey. These figures are based on a full fit-out to a reasonable standard of specification including bathrooms. They will go up if the project is located closer to central London and down if the project is further out. Tender prices have been rising steadily over the last few years. The tender price inflation forecast in this month’s Building Magazine is for a 5% increase over the coming year however builders that I have spoken to are suggesting that it will be more than this. House extensions attract VAT at 20% and a client contingency of say 10% is advisable.
Single storey extension at ‘Charwin’ under construction
Whilst m2 area costs are a good guide, design complexity and the level of specification can make a big difference. There are also project specific costs such as the cost of demolitions where required and the cost of other work within the existing house. The cost of the foundations can increase beyond the cost of the standard depth of one metre if the ground conditions are poor. External drainage costs can increase if extensive reconfiguration is required. If the design requires a structural steel frame rather than individual steel members this would be an extra as would the cost of a ground source heat pump installation with its associated ground loops and / or bore holes. The biggest single cost that is not included above is the cost of a new kitchen which can vary enormously. Several years ago I had two concurrent projects where the cost of the similarly sized kitchens differed by a factor of ten.
Two storey extension at ‘Fir Tree Cottage’ under construction
Architects provide ‘ball park’ estimates based on m2 rates but if cost ‘is of the essence’ a quantity surveyor or construction cost consultant / estimator can produce a more detailed estimate on an ‘elemental’ basis where every element of the project is costed. Typically for a project of this size clients opt to rely upon the architect’s estimate until the tenders are returned. At the end of the day it is the tender price at which a building contractor is willing to carry out the work that matters.
I am usually the starting point for a house extension project. The full architectural service is typically in three roughly equal parts which are concept design and developed design to Planning Application / technical design up to Building Regulations and tender / contract administration and construction to handover and close out. Partial services are available (eg just the first part or just the first two parts). I normally provide the ‘principal designer’ role as part of the architectural service. During the technical design stage the core team typically comprises a structural engineer to provide calculations for Building Regulations purposes, an underground drainage engineer to carry out the design for the underground drainage and an energy assessor to demonstrate energy efficiency in compliance with the Building Regulations. Consultant fees for this core team will typically be around 13% of the building cost. There will also be local authority fees for Planning (where required) and Building Regulations.
A house extension can be a viable alternative to moving house as it avoids the disruption and the cost of moving, stamp duty, legal and estate agents fees etc. On top of the desire for extra living space and bedrooms, information technology is driving a move towards living and working from home with the demand for additional space for a home office. As well as this the process, if handled properly, can be very rewarding.