Everyone is price sensitive. We scour Amazon or Ebay to find the cheapest version of a product & feel great when we know we’ve found the cheapest price.
Although modern technology trains us to do this as a lifestyle habit, unfortunately, the same logic doesn’t always apply within the service/ building industry
On Amazon you are often searching for the exact same product & then searching for the cheapest price.
In the building industry, the quality of the product & service you receive may not be anything like what you have envisioned. Jeffery and Wilkes are London’s leading house renovation specialists.
Beware of basing decisions on price alone. It would be a bit like searching for a mobile phone by price alone. Of course, you could get a bargain & pick one up for £50, but there is no point in trying to compare it with the latest IPhone.
A massive part of the build cost will be on materials & labour. On average we find this normally works out as a 40/40/20 split
- 40% on materials
- 40% on labour
- 20% overheads & profit
When basing a decision to select the cheapest quote, you need to bear in mind that the builder will still be looking to make a similar percentage on the profit. This means in some cases that the price they have for labour & materials is now less than the more expensive quote
£50k for extension
40% materials = £20k
40% labour= £20k
20% OHP= £10k
Quote 2 (cheapest quote)
£40k for extension
40% materials = £16k
40% labour = £16k
20% OHP = £8k
Although you may be saving £10k on the cheapest quote which is a huge saving, you need to bear in mind that behind the scenes the building company cannot be spending the same amount on materials. Potentially the £4k saving they need to find will be found by using cheaper/ inferior building products.
The same can be said of the labour. A skilled tradesman does not come cheap, so a £4k saving the company needs to find may come from less skilled labour.
This is not always the case by any means. Sometimes you can find a great builder who is prepared to earn less OHP & has a highly skilled labour force that is cheap. But this is very rare.