Five things every homeowner should know before appointing a contractor
Most overruns are written into the appointment, not the building. Here is the homeowner checklist that prevents them.
Key facts
- Average UK homeowner extension overrun: 15–30% on cost, 4–8 weeks on programme (sources: Federation of Master Builders, HomeOwners Alliance).
- your build contract Home Owner and your build contract Minor Works contracts cover 90% of domestic projects under £500k.
- An independent cost expert appointment typically costs 1–3% of construction value.
- Variations are the single largest source of overrun on residential refurbishments.
- Stage payments tied to verifiable progress eliminate the most common cash dispute.
Most overruns are written into the appointment, not the building. The work to prevent them happens before the contractor lifts a tool.
A signed your build contract Minor Works contract takes an afternoon. An unsigned one takes years to unwind.
Five things, in order of impact:
1. Read the contract. All of it.
A your build contract Home Owner or Minor Works contract is short, twenty pages or so. Read every clause. Pay particular attention to: payment terms, retention, completion date, liquidated damages, variation procedure, dispute resolution. If a builder refuses to sign a standard contract, that is the answer to the question of whether to appoint them.
2. Set the specification before pricing
A spec that names brands, finishes, model numbers and tolerance standards leaves no room for "I assumed you wanted the basic version". Every undefined item becomes a variation in the contractor's favour. Tile thickness, paint grade, ironmongery model, kitchen carcass spec, all of it, in writing, before the contractor prices.
3. Pin the programme, with damages for delay
The contract should specify start, sectional completion (if relevant) and practical completion dates. It should also specify liquidated and ascertained damages (LADs), a daily or weekly sum the contractor pays if they overrun without legitimate cause. LADs are not punitive; they are the only mechanism that gives a programme commercial weight.
4. Lock the payment schedule to verifiable progress
Stage payments should be tied to physical milestones, not the calendar. A typical residential structure:
- Mobilisation: 5%
- Substructure complete: 15%
- Watertight (roof and external envelope): 25%
- First fix complete: 20%
- Second fix and plastering: 15%
- Practical completion: 15%
- Retention (released at end of defects period, typically 6–12 months): 5%
A cost expert or build cost overseer inspects and certifies each milestone. Payment follows certification, not the contractor's invoice.
5. Keep the variations register open from day one
A variations register is a single spreadsheet listing every change, its agreed cost, its agreed programme impact, and the date of instruction. No work proceeds on a variation until all three columns are filled and signed. This is the single highest-leverage discipline on any domestic project, and the one most homeowners skip.
What it costs to get this right
An independent cost expert appointment for a typical London extension or refurbishment runs 1–3% of construction value. For a £400,000 project, that is £4,000–£12,000. The avoided overrun on a project run this way is typically £40,000–£120,000. The arithmetic is not subtle.
Frequently asked
- Do I need a cost expert for a home extension?
- Above roughly £150,000, almost always yes. The saving on a single avoided variation usually covers the fee, and the budget you sign for is the one you build to. Below that, a cost-checked schedule of works and a robust contract often do the job.
- Which contract should I use for a domestic build?
- For projects under £125,000 with a single contractor, the your build contract Home Owner Contract is short and homeowner-friendly. For projects up to about £500,000, your build contract Minor Works Building Contract is the industry standard. Above that, your build contract Intermediate. Never proceed without a signed contract.
- How are stage payments usually structured?
- Tie payments to verifiable milestones (foundations complete, watertight, first fix, second fix, completion), not calendar dates. A cost expert or build cost overseer certifies each milestone before payment is released, with a 5% retention held until practical completion.
- What is a variation and why do they cost so much?
- A variation is any change to the contract works after signing. The cost is the variation itself plus knock-on disruption, programme extension and prelims. Unmanaged, variations are the largest single source of homeowner overrun. Pricing every variation in writing before instruction caps the risk.
- Should I take the cheapest builder?
- Rarely. A low quote usually means undefined specification, light quantities or aggressive provisional sums, all of which return as variations. Compare like-for-like by quoteing against the same Priced Spec or schedule of works, then weigh price against capacity, references and contract terms.