Ask an Architect: The Hidden Costs of Renovating or Extending Your Home That Most People Overlook
Renovating or extending your home is an exciting process—one that can completely transform the way you live and add significant value to your property. But beyond the well-known costs of construction, materials, and finishes, there are often unexpected expenses that catch homeowners off guard. These hidden costs can have a significant impact on your overall budget, particularly when working with period homes and country properties.
Having worked extensively on renovations and extensions for homes across Surrey, London, and the countryside, we’ve seen firsthand where budgets can creep up. Here are five of the most overlooked costs—and how to prepare for them.
1. VAT on Construction Costs
One of the biggest misconceptions we see is Clients assuming the Contractor’s quote is the final cost—only to realise later that VAT hasn’t been factored in. Construction services in the UK typically attract 20% VAT, unless you qualify for a reduced rate (which is quite rare, unless it is a new build).
Before signing any contracts, always check whether quoted prices are inclusive or exclusive of VAT. At studio elle architecture, for example, we do not charge VAT on our fees—but not all architects operate this way. It's important to ask upfront, as VAT alone can dramatically impact your budget.
2. Insurance During Construction
Most standard home insurance policies do not cover construction work, meaning you may need a specialist renovation insurance policy. This protects against risks such as structural damage, theft of materials, and third-party claims while your home is under construction. Before starting work, it’s essential to speak with your insurance provider to understand what is and isn’t covered—and factor in any additional costs.
3. The Unexpected Energy Bill
Many homeowners are surprised by how much energy consumption increases during a renovation. Power tools, site lighting, and temporary heating (especially in winter months) can all lead to a substantially higher electricity bill than usual. While it's difficult to predict the exact amount, it’s worth building buffer into your contingency budget—particularly if your project runs over the colder months when heating costs rise.
4. Surveys & Specialist Reports
Beyond expected professional fees—such as architectural, structural, and party wall surveyor costs—there are additional reports that may be required, depending on your home’s location and condition. Some of the most common include:
Soil Reports – can be necessary if your home is near large trees where roots could impact foundations.
Build-Over Agreements – if your project is near or over a sewer or manhole, you may need permission from your water provider, often requiring structural details from an engineer.
Asbestos Survey & Removal – If you are carrying out extensive strip-out an asbestos survey we strongly recommend this survey before starting. If asbestos is discovered mid-project, work may need to stop while removal takes place, adding both time and cost.
It’s always best to identify these requirements as early as possible to avoid delays and unexpected expenses – however sometimes additional reports become necessary later in the project and should fall within the contingency.
5. Unexpected Site Findings & Hidden Structural Issues
No matter how well a project is planned, once work begins, there’s always a chance of uncovering surprises—especially in older or period properties. Some of the most common hidden issues include:
Structural Problems – Uneven or failing foundations that require underpinning.
Damp & Rot – Hidden behind walls or beneath floors, requiring immediate attention.
Outdated Drainage & Pipework – Discovering cracked pipes or insufficient drainage can lead to extra excavation work.
Because of these potential discoveries, we always recommend setting aside 10-15% of your total budget as a contingency fund. Investing in detailed pre-construction surveys can help minimise the risk, but some things can only be uncovered once walls are opened.
How to Plan Ahead & Avoid Budget Overruns
At studio elle architecture, we believe in careful planning. We guide our clients through every stage of the process—helping them anticipate costs, navigate planning approvals, and likely consultants and reports required to and make informed decisions. Working with an architect who understands both the design and financial aspects of a renovation can save you considerable stress (and help to predict the unexpected costs) along the way.
Thinking of renovating or extending your home? Get in touch with studio elle to start your project with confidence.
