How much will a builder cost? An updated look at prices

Exactly what does a builder cost? Whether you’re embarking on a full new-build house project or just an extension, one of the first things you’ll want to establish is how much a builder is going to cost. This is a big question and the answer will depend on a variety of factors, ranging from what you’re building and the level of design/finish, to where it’s located and the type of ‘builder’ you are engaging to undertake the project.  

If your build project is relatively small your builder may be skilled in doing all of the work themselves or they may be a building company, dealing with the core infrastructure on site, and engaging subcontractors for specific trades to complete the project.  

Whatever your project, understanding how much builders and other trades might cost will help you budget correctly. I’ll explain some typical rates, the ways in which builders provide their costs and the factors that will influence these.

What does a builder cost in 2023?

You will typically find that London and the Southeast commands the highest day rates for builders, but rates are rising even higher in some areas of the country such as Yorkshire and Humberside, where supply and demand has pushed up day rates since the pandemic. Here are some average hourly and day rates for general trades, based on an 8-hour day.

Comparing day rates across builders can be useful as an initial guide as to who might be the most cost-competitive, however, it’s not necessarily a good indication as to how much the job will cost.  

For larger projects a builder will usually calculate their total price using a ‘measured rates’ basis.  This means they will provide a cost per m2 for the work which will include everything (materials, labour, plant etc) to arrive at their cost per element of the build and total quote.  Individual trades typically provide fixed cost quotes based on labour and materials. 

However, when the nature of a project is too small for a builder to work competitively on a ‘measured rates’ / fixed quote basis, then day and hourly rates can be useful. A builder would usually provide a day rate for smaller jobs such as knocking through an opening between two rooms.  

Having hourly or day rates at the quote stage can also prove worthwhile if there are variations to the work. By having these rates to hand you can agree the final account with the builder much quicker as you have base costs to refer to, along with the material and plant invoices.

I always advise clients to approach at least four contractors as a minimum at tender stage, following an initial ‘would you like to tender’ call some three to four months prior. This will drive competitiveness from the builders pricing the contract. Freeze your design as early as possible, variations will cost more when the project is underway and the builder won’t be pricing them competitively at that stage.  

How do builders calculate their costs?

Builders will typically provide either an estimate or a quote for the project, as discussed in detail in last month’s Build cost clinic. An estimate is basically an educated assessment of the likely cost but it’s not guaranteed to be the final cost. A quote on the other hand is a guarantee of the final cost for the detail specified for the project.  If the builder is just coming along to discuss the potential project in high level terms, they will only be able to provide an estimate. If you are able to provide full design information and specification you can obtain a fixed quote.

Depending on the size of the project the builder may provide a breakdown of their quote into labour and materials. However, in most cases if the builder has priced a Bill of Quantities/Schedule of Works prepared by a Quantity Surveyor, then they will provide rates per m2 for each item of work and not necessarily a breakdown of labour, plant and material.  As the client, you can of course request a breakdown, but as most quotes are provided free of charge, if it’s a large project the builder will probably want to know that they have won the job and the breakdown will be a requirement at contract stage.

What factors influence the cost of a builder?

• Size of building company and overheads: The ‘no job too small’ slogan isn’t applicable to all builders, some will only work on medium to large projects, ensuring they are tied into a project long term for their own security.  If they were to quote for a small extension they wouldn’t be as competitive as a builder who has less overheads and carries out this type of work frequently.  
• Location: The cost of a builder can vary considerably based on location alone. London and the surrounding areas have some of the highest construction costs in the UK but following the pandemic, these costs are being matched in other areas such as Harrogate and Yorkshire where supply and demand is having a real impact.  The location of your builder in relation to your site can also influence cost as they will need to factor in fuel costs and travel time if they are located further afield from the project, so always try and keep your builder search local. A radius of 25 miles or up to 45 minutes is a good guide.
• Specialism (period/heritage contractor): If your project requires specialist work from Listed Building contractors, lime-render plasterers, conservation builders, etc this will increase the cost as their knowledge and expertise is specialist and therefore attracts a premium.
• Complexity of works: The more complex the construction, whether through complex geometry or a wide range of materials, the more expensive it is. Curved walls and circular windows, for example, will add significantly to the cost from your builder, both in terms of material costs and the number of labour days required. A huge variety of materials may require a number of different skilled trades to install them, driving up labour costs.
• Build method: There are so many different build methods available these days, from traditional masonry and timber frame, to SIPS, ICF and Oak Frame.  Using a builder who is experienced in your chosen method will keep the cost competitive. For example, a traditional builder who has always used brick and block is unlikely to provide a competitive quote to construct a timber frame if it is new to them. 
• Programme: If your programme is condensed in time, due to the fact you have to complete the works over a set period, then your builder will probably be working uneconomically, out of sequence and labour costs will be increased. 
• Size: Generally speaking, cost will increase with the size of the build. However, economies of scale can be achieved on some projects to reduce the cost per m2, so whilst the overall cost will be higher, you can achieve a lot more for your money. For example, adding another floor to a single storey build won’t automatically double the cost as the foundations and roof are already accounted for.
• Site access: Your project may cost more if the access is restricted. Your labour costs will go up if your builder has to handle deliveries and site waste twice due to insufficient vehicle access. If access is difficult, they might not be able to bring in certain machinery, which might require them to dig the foundations by hand at a higher cost.  You may even need to change your build method which will impact cost.  Timber frame and SIPS are brought to site on large vehicles, so access is crucial. 
• Site conditions: Your build costs may increase significantly if your site slopes. Site access and logistics may become challenging, requiring careful planning for safety. The structural solution will undoubtedly increase expenditure. 
• Finishes If you are sticking to basic, standard products then costs will be kept to a minimum as they are easy to obtain and take minimal time to install, thereby keeping labour costs down. Once you move to higher end finishes, such as expensive tiles or bespoke joinery, the materials and labour costs will rise accordingly.