15 Dec 2011

How accurate are QSs?

I have a number of editions of your book and am now on the brink of my first self build. We have planning permission and detailed designs, and have had a couple of builders tender for the work, which was a condition from the bank in order that they would fund the project. However the costs are more expensive than I planned (surprise surprise I hear you say), and when I costed some of the major elements (ground works, external walls, roof) using your latest book, I came to half the price quoted by the builders. I have also got a few local sub contractors to quote and their numbers match mine not the builders
So I have employed a quantity surveyor to do it properly on my behalf, and am now the proud owner of 25 pages of costs for the project. Thankfully I am comfortable with this kind of numerical analysis, but I cam imagine at this stage most peoples eyes glaze over ! Unfortunately his numbers come in very similar to the builders (They would do wouldn't they I hear you say, they have both used QSs to cost the project and QSs will generally use the same process and hence come up with the same cost).
My analysis of some of the big numbers suggests that some of my QS's numbers are the same as the numbers from your book, but some are significantly more expensive (50% to 100%) more.
So my question is as a self builder what would your guidance be regarding the cost you can self build for Vs a cost given by a QS. Is there always fat in the QS figure to cover eventualities ? I guess I'm hoping for a shortcut rather than go through and cost the whole project using your book to come up with the relevant figure.
I want to self build but want to be ensure that there is a saving in there by doing this.




Good to hear from you. 

My feeling is that you are coming up against one of the age-old conundrums in building in that an awful lot of pricing is an art rather than a science. An expensive QS is probably about as accurate as you can get, but if you were to ask three other expensive QSs to undertake the same task you would get three different results.  And so it is with builders quotes. They will assess the size and difficulties of each task slightly differently and, crucially, they will assess the risk of these tasks being completed on time and on budget quite differently. The more off-beat the project, the more widely varied the quotations will be. My cost tables are really only there to provide the roughest of guidelines, not to construct quotations. 

One of the critical factors is risk - or more accurately the perception of risk. You have referred to it as fat which is how many people think of it. but its really a risk premium paid by you for them taking on the fixed price quotation. IE the risk of cost overrun is being transferred from you to them, and this is, if you like, insurance money for them taking on this risk. In theory, you can do away with this risk premium by becoming your own contractor/project manager, but you will only save money if everything (OK, most things) goes according to plan. If you prove to be a lousy or an unlucky manager, you may end up spending more money than the fattest of fat builder's quote.

I hope this helps. I realise this is very general advice, but as you note, it's a common problem which people undertaking selfbuilds face. We all want it to be costed out simply like a shopping list, but it almost invariably never works out like that.


Thanks for your response. I think you maybe underestimating the value of your cost tables ! In your book you actually break each of the tasks down into material and labour which makes it easy to add up the totals. However the QS uses a fixed rate for tasks which includes labour, materials and equipment (i.e. £24 per sqm of blockwork - which I think is spot on for blockwork but some of the others seem very high). This makes it very hard to break down to see what is actually costed without working out the materials. Indeed the QS bemoaned the fact that in the old days he use to produce a bill of materials but now no one wants it. They just use the fixed rate to work out the costs, and then only ever plan one stage ahead. However he is very reluctant to produce a bill of materials for me.
I've just re-read your chapter on project management and it all rings true. I would just love to have the complete bill of materials so I could see once and for all how much the materials would cost Vs labour. If I use the QS's 40% is material and 60% is labour, then if I assume each subbie earns £200 per day (quite generous ?) then the labour cost is the equivalent of 10 people for a whole year !




Thanks for the interesting feedback. I spend a ridiculous amount of time on these cost tables and rarely get any feedback on how people use them.


9 Dec 2011

Are empty homes really a scandal?

This week we've been treated to a new housing campaign, launched on Channel 4. The problem — no, let's get this in perspective — the scandal of empty homes. George Clarke has been bestriding our screens examining what has been going down. From the bits I've seen, he has mostly been laying into the now discredited Pathfinder Policy of the last government, which sought to rip up old terraced streets up North and replace them with state-of-the-art, zero-carbon flats, or Yvettes, as they never quite came to be known.

You can trawl up and down Liverpool, Stoke-on-Trent or Sunderland and find really depressing looking wastelands of derelict and boarded-up housing estates. As Clarke kept pointing out, these could all be done up for.....well, it wasn't entirely clear how much. The key fact that he kept reiterating was that it was cheaper to do them up than it was to build new.

But the research from the Technology Strategy Board's Retrofit for the Future programme suggests otherwise. That is that if you are to create good homes fit for 2050 and our low carbon future, rebuilding may well be a more sensible and cheaper option.

Bringing these homes back to life would be expensive, however you go about it. And the fact is there may well be very little demand for these renovated or rebuilt homes in the private market. Liverpool, Stoke-on-Trent, Sunderland — none of them are exactly setting the jobs market alight at the moment. Set against the demand for affordable homes in these towns, things look very different, but that's not a market demand which would lead to people come in and spend money on these houses in return for sensible financial return.

So juxtaposing the number of empty homes with the affordable housing demand may look compelling, but it's voodoo economics. The fact is there isn't enough money for affordable homes whether it's building new ones or doing up empty ones.

Which isn't to say that there must be some spots where terraces of empty homes could be given over to enthusiastic community selfbuilders to make of them what they will. David Ireland makes this point in his open letter.

But the truth is that there will still be one hell of a lot of empty homes in places where no one is ever going to find a sensible use for them. It's very sad, but I'm not sure it really counts as a scandal.