Your new home build budget should be carefully planned. It’s easy to allow inspiration,

creativity and excitement to run away with your emotions- after all, this is your dream

home we’re talking about- but your head must rule your heart when financing this

exciting project.

There are so many different elements to think about- not least, whether you’re going to be able to

fit your massive American freezer into your fancy new kitchen.

Then there’s tiles and windows, and energy-saving this and eco-friendly that, and facing east to

catch the morning sun, or west to catch the evening sun……

And should you spend so much money on the garage? Do you even need a garage?

Which child gets the biggest bedroom…will you need more bedrooms?

What if your mother moves in?

BOOM!!!! Your new home budget can quickly go bust if you don’t approach it correctly. Having seen

many new home projects through from beginning to end, we’ve put together this guide to help you

keep the finances on track, and your finances under control. So, let’s get started!

Step One: Set realistic expectations for your home build budget

Many first-time builders underestimate the total costs involved. Start by researching average costs

per square foot in your area and factor in additional expenses beyond just construction. Be prepared

for unexpected costs and allow for a contingency of at least 10% of your total budget.

Step Two: Break down the major cost categories

Here’s a list of the major cost categories in a home construction project:

• Land acquisition

• Site preparation

• Foundation

• Framing

• Exterior finishes

• Interior finishes

• Mechanical systems (central heating, plumbing, electrical)

• Landscaping

Understanding these categories helps you allocate funds more effectively. For example, the

foundation and framing often account for a significant portion of the budget, while interior finishes

allow for more flexibility in spending.

Step Three: Identify the hidden costs and contingencies to factor into your new home build budget

Beyond the obvious construction costs, there are several expenses to consider. Discuss these factors

with Ross and Mike here at Builditwithus.Ltd by contacting them here:

Contact Us

You will need to consider:

• Permit fees and inspections

• Architectural and engineering fees

• Survey costs

• Temporary utilities during construction

• Insurance

• Property taxes

Even when you think you’ve thought of everything, it’s important always to include a contingency

fund of 10-20% to cover unexpected costs or changes during the build. It’s better to

overcompensate than find yourself short of money to complete your project to the standard you

need.

Step Four: How to estimate and control material costs:

Material costs can fluctuate significantly, impacting your budget. To manage this:

- Get multiple quotes from suppliers

- Consider bulk purchases for discounts

- Look for alternative materials that offer similar quality at lower costs

- Time your purchases to take advantage of sales or off-season pricing

Bear in mind that choosing higher quality materials upfront can lead to long-term savings in

maintenance and energy costs.

Build It With Us Ltd works with the best local suppliers to ensure that materials are purchased at the

most competitive prices from local suppliers, only dealing with reputable local suppliers who supply

the highest quality building materials for any of their building projects.

Step Five: Figure out your Labour Costs and Budget for them Effectively

Typically, you should expect that 30-50% of your new home build budget will be spent on labour.

Therefore when you’re considering how this significant portion of your budget should be allocated,

you should consider these factors:

- Get detailed quotes from contractors

- Consider the complexity of your design - intricate details require more skilled labour

- Decide whether to hire a general contractor or manage subcontractors yourself

-Having multiple contractors involved in the project. Using multiple contractors can cause delays,

increased expenses and communication errors. Frequently the work of one contractor can be

delayed by waiting for another to be present onsite, or to complete a job.

Remember that the cheapest option isn't always the best - skilled labour can save money in the long run by reducing errors and rework.

Ross and Mike at Build It with Us have completed many new builds and have expertise in building

new homes from the groundwork up. The only other contractors you’ll need to complete your new

home would be certified gas and electrical engineers, who Build It with Us will provide for you.

Ross and Mike will work through your whole new home build, from the blueprint to reality. This

reduces the headaches caused by delays and miscommunications which can characterise working

with multiple trades.

Step Six: Consider the impact of location and site preparation on your new home build budget.

Your chosen location significantly affects your budget, so thorough research is required before any

project can be considered. Bear in mind:

• Land costs vary widely by area

• Site preparation can be a major expense, especially for sloped or difficult terrain

• Consider access to utilities - connecting to distant services can be costly

• Local building codes and regulations may require specific (and potentially expensive)

features

Therefore it’s vital to carry out a thoroughly assessment of any potential sites and factor these costs

into your initial budget to avoid surprises later.

Step Seven: Financing options and budgeting for interest/loan costs

Most people need to seek finance for their new home build. When budgeting, consider:

• Different types of construction loans and their terms

• Interest rates and how they affect your overall budget

• Closing costs and fees associated with financing

• The possibility of rate changes during the build process

• And don’t forget that contingency fund, to cover unforeseen costs.

Work closely with a financial advisor or mortgage specialist to understand all costs associated with

financing your build.

Step Eight: Consider Energy efficiency investments and long-term cost savings

With energy prices being what they are, it’s important to factor in energy efficiency factors into your

new home build budget. Not only will this save you money in the short term, but an energy-efficient

home is a much more desirable proposition for future buyers.

Where your budget will allow, consider installing the most energy efficient windows, insulation and

heating systems. Even though they may initially seem more expensive than their less energy-efficient

counterparts, these measures will pay you back over the years, and even increase the value of your

new home.

Investing in energy efficiency can increase upfront costs but lead to significant long-term savings:

• High-quality insulation

• Energy-efficient windows and doors

• Solar panels or other renewable energy systems

• Smart home technology for optimized energy use

Calculate the potential return on investment for these features to determine if they fit within your

budget and long-term financial goals.

If you are unsure about these choices, discussing your plans with your architect and Build It With Us

can help you to make the correct decisions for your particular build, budget and requirements. The

choices can appear overwhelming, so it’s vital to seek advice from building professionals.

Step Nine: Balancing wants vs. needs when allocating your budget

Take your time with this one, because this is where you can easily bust your new home build budget!

Sit down and think through your genuine priorities by creating a list of must-haves vs. nice-to-haves.

Consider which features add the most value to your daily life: which rooms you are likely to be

spending most of your time in, for example.

Look to the future and think about potential resale value- in other words, which features will add

value to your home should you decide to put it onto the property market further down the line.

It’s also important to be prepared to make trade-offs - splurging in one area may mean economizing

in another. Remember that some features can be added later, while others are much harder to

change post-construction.

Step Ten: Utilise Tools and software for creating and managing a home build budget

Luckily, there is a wide range of software on the market to help you with the headache of budget

allocation and number crunching when you’re planning your new home build budget.

A good place to start is to enter your numbers into spreadsheet software like Excel or Google Sheets

for basic budgeting. For a specialised software aimed at self-builders, you could look at installing the

Build It app, https://www.self-build.co.uk/app/. There is a monthly subscription, but it covers issues

associated with planning new builds, such as materials advice, planning and budgeting.

These tools can help you stay organized and make informed decisions throughout the build process.

In conclusion, creating and sticking to a home-build budget requires careful planning, research, and

ongoing management. By considering all aspects of the build process, from land acquisition to final

finishes, you can create a realistic budget that helps turn your dream home into reality.

Remember to stay flexible and communicate openly with your financial advisors throughout the

process. With proper planning and management, you can navigate the challenges of home building

while keeping your budget on track.

If you would like help in planning, budgeting and ultimately building your dream new build home,

then schedule a call today with Ross and Mike at Build It With Us Ltd.

Citations:

[1] https://onebasemedia.co.uk/construction-blog-topic-ideas/

[2] https://www.housebuild.com/inspiration/stories/budgeting-your-self-build

[3] https://www.buildxact.com/uk/blog/the-smarter-way-to-create-a-construction-budget/

[4] https://www.suffolkbuildingsociety.co.uk/blog/how-to-budget-for-a-self-build/

[5] https://www.meadowlarkbuilders.com/blog/building-a-custom-home-the-budget-breakdown