Budgeting tips for housing developments – covering the hidden costs of building big
The construction sector is showing some signs of recovery as second quarter growth continued in July.
As a result, the industry has seen a rise in the levels of business activity experienced as well as an increase in the levels of new business.
An associated increase in construction employment has resulted in the highest level of output since 2010, although consistently high levels have to be traced back even further.
With better conditions meaning a rise in construction levels across the UK, many clients are choosing to engage in more property development.
This goes hand in hand with recent plans to increase the levels of housing in the UK to meet demand.
But there are many hidden costs which need to be considered when building, all of which can push the price of a project through the roof. Failing to keep an eye on basic costs may eventually lead to larger financial problems, perhaps even resulting in a need to call in the services of established insolvency practitioners who can offer expert advice in such an area.
Things to consider
With any project, the land that is going to be developed must be purchased and prepared for building and this often provides the first major outlay for any contract.
Demolition of an existing building and land clearance can be expensive, and all before construction can begin in earnest.
Planning also costs money, as the application process and surveyors’ fees will almost certainly build up, especially if the project fails to receive permission in the first instance.
In many cases, building upwards is the best way to get the most out of the land purchased, but several regulations can limit just how high developments can go.
Of course, the higher a build goes, the more it costs in terms of materials, which is why simple plans are often preferred to more complex ones.
Curves and strange angles take more time to build, increasing labour costs while the costs of extra materials can stretch the budget.
Furthermore, the cost of linking utilities to the site can often be expensive, and need to be carefully monitored throughout the building process.
There are a number of factors to consider when entering into a big build project, and all need to be carefully thought through to make sure the project can be completed as planned.
By Phil Smith
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.
View all Business Insights