Why refurbishment budgets always overrun, and how to stop yours
Every refurbishment costs more than the estimate. The only variable is whether you planned for that.
Refurbishment estimates are produced before the property has been opened up, which means they are estimates of the visible work. The expensive work is behind the plaster, under the floor and above the ceiling, and nobody can price it accurately until the property is stripped — by which point you own it.
That asymmetry is not a flaw in the process. It is the process, and it is why a contingency is not padding. It is the price of the information you do not yet have.
The costs that appear after exchange
There is a predictable set of discoveries, and knowing the list in advance is most of the defence. A builder's quote based on a viewing is a quote for the work they could see.
- Rewiring: a property that has never been rewired will need it, and the cost is far higher once the walls are finished
- Replumbing, particularly in older properties with lead pipework or a shared supply
- Asbestos, in any property built or refurbished before 2000, in places nobody looks until they start work
- Damp and timber decay, which is usually a symptom of a defect that also needs fixing
- Non-standard construction, which changes both the cost of work and the property's future mortgageability
- Structural movement that requires a structural engineer rather than a builder
- Roof and rainwater goods, which are invisible from the ground and rarely in good condition on a tired property
The contingency, sized honestly
A contingency of 10% is conventional and usually inadequate for a full refurbishment of an older property. For a cosmetic refresh, 10% is comfortable. For a property that is being stripped back to brick, or that has been empty for years, 20% is more honest and 25% is not unreasonable on a first project.
The contingency has to be money you actually hold, not a line in a spreadsheet. A refurbishment that runs out of budget halfway through leaves a property that is neither lettable nor sellable, which is the worst of both outcomes and the point at which investors are forced into expensive short-term finance.
Spending money on information early
The cheapest money you will spend on a refurbishment is the money spent before you buy it. A full building survey costs a few hundred pounds on a typical house and routinely identifies five-figure defects. A drain survey is inexpensive and finds problems that are expensive to fix and impossible to see.
If you are buying at auction, where you cannot make the purchase conditional on a survey, the calculation changes: you are accepting the risk, so the price you bid must include it. Either you pay for information, or you pay for the absence of it — and the second is usually more expensive.
Common questions
- How much should I budget for a full refurbishment?
- Costs vary hugely by region and specification, but as a planning figure, a light cosmetic refresh typically runs to £400–£700 per square metre, a standard modernisation £700–£1,200, and a full back-to-brick refurbishment with structural work can exceed £1,500. Always get at least two itemised quotes and never accept a single round-number figure.
- Should I use a builder recommended by the seller?
- Be cautious. There is an obvious conflict if the seller's builder is quoting on work that affects the price the seller will achieve. Get your own quotes, and if you are using a builder for the first time, ask for recent completed projects you can visit and for the contact details of previous clients.