How Much Contingency Should You Budget for a Refurbishment?
As a rule of thumb, many homeowners are advised to hold back around 10 to 15 per cent of the build budget as contingency for a refurbishment, and more for older or heavily altered properties. It is not a figure to treat as gospel, because every house is different, but it is a sensible starting point. This guide explains what contingency is for, how to size it and how to avoid spending it needlessly.
What contingency is, and is not
Contingency is a reserve for unforeseen problems. It is not a pot for upgrades, a bigger kitchen or extra tiles you decided you liked halfway through. Treat it as protection for things you could not reasonably have known when you priced the job.
Keeping it separate from the main budget, and mentally ring-fenced, stops the project drifting.
Why refurbishments need more contingency than new builds
When you refurbish, you are dealing with what is already there. Behind plaster and under floors there can be:
Damp, rot or woodworm.
Old or unsafe wiring and plumbing.
Asbestos in older materials, which needs specialist handling.
Structural movement, poor previous alterations or undersized timbers.
Drainage that is not where the drawings say.
Out-of-level floors and walls that complicate new fittings.
London's Victorian, Edwardian and interwar housing stock in particular can hide surprises. A survey before you start helps, but it cannot see everything.
How much to set aside
A rough guide, which you should adjust to your own circumstances:
Newer, well-maintained house, simple scope: a lower contingency may be reasonable.
Typical older home, moderate works: around 10 to 15 per cent is a common allowance.
Period property, heavy structural or service changes, or limited survey access: many people hold 15 to 20 per cent or more.
These are indicative percentages, not quotes. Your builder should be able to advise based on what they can see once they have inspected the property.
Other costs people forget
Contingency is not the only buffer you need. Check that your budget includes:
Design, engineering and building control fees.
Party Wall surveyor fees, where relevant.
VAT, if applicable to your project.
Skip hire, scaffold and site welfare.
Furniture, curtains, flooring and decoration beyond the builder's scope.
Temporary living costs, if you move out.
How to protect your contingency
Fix the scope early. Late changes are the most common reason budgets slip.
Agree a detailed specification, including provisional sums for items you have not chosen yet, so allowances are realistic.
Open up early. Where possible, uncover hidden areas, such as floors or walls, at the start rather than halfway through.
Ask for changes in writing, with a price and time impact before you approve them.
Review the budget regularly with your builder so there are no big shocks.
Our cost calculator can give an early ballpark, and you can then add your own contingency on top. For loft projects, see our loft conversions page for what is involved.
Think about how you will feel if the contingency is needed. A hidden drainage run or a rotten joist can be frustrating, but it is far less stressful if you have already set money aside for it. Many homeowners find it helpful to treat the contingency as a separate account that only the principal decision-maker can release.
It also helps to ask your builder how they report unforeseen items. A good builder will tell you promptly, explain the options, give a price and wait for approval. That discipline keeps spending visible and avoids the end-of-project surprise that spoils an otherwise good job. If you are planning a larger scheme, such as a loft conversion, discuss the likely risks before you commit.
If your budget is tight, resist the temptation to squeeze the contingency to afford a nicer finish. A smaller scope with a healthy reserve almost always beats a bigger scope with none. You can always upgrade fittings at the end if the money is still there, and our cost calculator is a useful way to test different scopes before you commit.
Frequently asked questions
Should I tell my builder how big my contingency is?
You do not have to. Many people keep it private, to avoid it being treated as spendable, but your builder should know your overall limit.
What if I do not use it?
Great. Any unspent contingency simply stays in your pocket, or goes towards finishing touches once the work is complete.
Is contingency the same as a provisional sum?
No. A provisional sum is a placeholder in the quote for an item whose cost is not yet known. Contingency is a reserve held on top.
Plan your refurbishment with TNK
Our team has refurbished homes across London for 17+ years. We can inspect your property, talk you through likely risks and help you set a realistic budget. Contact TNK Construction to arrange a visit.
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