Renovation Budgeting: 9 Common Costs Homeowners Overlook

14 Jan

Renovating a home can be an exciting process—but managing the budget is often one of the most daunting parts. Even with the best intentions and a spreadsheet in hand, there are always a few things that tend to get missed. These overlooked costs can quickly mount up, putting pressure on both the schedule and the overall success of the build.

In this post, I’ll highlight the key areas that homeowners frequently underestimate or forget entirely when budgeting for a renovation project. Whether you're planning a modest extension or a full-scale renovation, being prepared for these hidden costs will help your project run more smoothly and reduce stress along the way.

1. Fees Beyond the Build

When setting a budget, it's easy to focus on the construction costs—bricks, mortar, labour. But there’s a whole layer of professional and statutory fees that sit outside the builder’s quote. These include:

Architectural fees: Design development, planning applications, technical drawings, and site visits all take time and expertise. These services are usually phased, and not all up front, but it’s important to factor in the full scope from the outset.
Planning and Building Control fees: Submitting a planning application or obtaining a lawful development certificate typically comes with a fee, as does Building Regulations approval.
Structural engineer: Any structural alterations will likely require calculations and drawings from a qualified engineer.
Party Wall surveyor: If you're working close to a neighbour’s boundary, the Party Wall Act may apply, and surveyors’ fees are often the responsibility of the building owner.

These costs can account for 10–20% of the total project value, so it’s worth allowing a realistic figure early on.

2. VAT and Tax Considerations

VAT can significantly affect your budget. Most residential renovation and extension projects are subject to 20% VAT, which isn’t always apparent when discussing early-stage costs. Some builders quote ex-VAT, which can lead to surprises when the invoice arrives.

There are exceptions—work to listed buildings, for example, may be eligible for a reduced rate—but it’s important not to assume this will apply. It’s always best to clarify VAT status with your contractor and accountant well in advance.

3. Temporary Living Costs

If the renovation involves major disruption—knocking through rooms, removing roofs, or full rewires—you may need to move out for a period. The cost of renting alternative accommodation, storing furniture, or commuting further for a few months can add up quickly.

It’s a good idea to discuss with your contractor whether phased works could keep part of the home habitable, but if not, budget realistically for a temporary move.

4. Upgrades and Client Changes

One of the most common reasons renovation budgets blow out is client-led changes during the build. It’s natural to want to tweak or upgrade materials once you see the space taking shape—whether it’s switching to a more expensive kitchen worktop or adding a rooflight that wasn’t in the original spec.

To manage this, I usually recommend allocating a contingency of at least 10–15% of the build cost. This gives breathing room for changes without pushing the whole project off course.

5. Landscaping and External Works

The focus during a renovation is usually on the building itself, but don’t forget the outside. Things like:

Making good disturbed driveways or patios
Building retaining walls or steps
Replacing fencing or boundary treatments
Installing external lighting or drainage

These are often not included in a builder’s initial quote unless specifically asked for. It’s worth thinking through how you want to use the outdoor space once the building work is done—and budgeting accordingly.

6. Fittings, Fixtures and Finishes

Even when the builder includes a ‘PC sum’ (provisional cost) for things like kitchens or bathrooms, these figures can be modest and may not reflect your actual choices. Higher-spec finishes, bespoke joinery, or smart home systems will push the budget higher.

It’s a good idea to make as many design and specification decisions as early as possible. This helps keep quotes accurate and avoids rushed (and costly) decisions under pressure.

7. Utility Upgrades

Older homes often need upgrades to their services to accommodate modern living. You might discover that:

Your consumer unit (fuse box) needs replacing
The water main is undersized
Gas pipes need rerouting
Internet or Wi-Fi infrastructure needs improving

These upgrades aren’t particularly glamorous, but they are essential for safety, comfort, and future-proofing. Discuss these with your contractor or electrician during the planning stage, rather than waiting for them to become an urgent issue mid-build.

8. Insurance and Warranties

You may need specialist insurance during the works—either a renovation-specific policy or ‘unoccupied home’ cover if you're moving out. Post-completion, it’s wise to check that your home insurance reflects the new layout and rebuild cost.

If you're creating a new dwelling or undertaking substantial structural work, you might also consider a structural warranty. This isn’t always legally required, but it can be helpful if you ever plan to sell the property.

9. Post-Completion Snags

Even with the best team in place, no project finishes perfectly. Budgeting for post-completion snagging—minor repairs, paint touch-ups, finishing details—gives you the flexibility to wrap things up properly without delay.

It’s also worth setting aside a little for soft furnishings and home comforts. After all, once the dust has settled, you’ll want the finished space to feel inviting and complete.

Planning Ahead Makes All the Difference

Budgeting properly for a renovation means looking beyond just the builder’s quote. A clear-eyed, realistic budget that includes the less glamorous line items—fees, VAT, utilities, insurance—gives you far more control over the process.

I often find that projects run more smoothly and feel less stressful when these elements are openly discussed and planned for at the start. No one enjoys surprises when it comes to money, and with the right foresight, they can often be avoided.

Joshua Hovey