Architects Fees, Construction Costs and Feedback

The single most popular page on my website describes the Architects Fees I charge. Clients regularly tell me that it is refreshing to see an Architect's Fees in advance. I also publish a guide to the usual costs and time-scales for House Extensions and New-Build Houses.

I have also blogged in the past about the advantages for Architects in publishing fees and information about the cost of construction, particularly when dealing with clients who have never hired an Architect or built anything before. That blog is the most popular one out of the 45 posts I have written to date. It seems everyone wants to know about Architects fees.

Given the popularity of the information I post on the web, I have decided to ask for some information in return. I have created a survey regarding the fees, costs and timescales I publish on my website. There will be a monthly prize of a £20 John Lewis voucher, open to any entrant from the UK. 


In my view, the biggest problem any business faces is working out what to charge: if the fees are too low, you run out of money. If the fee are too high, you run out of customers!

I am keen to hear your views.

Borrowing To Build A House? - Read This First !

Any homeowner will be familiar with the process of buying a home and most people have a general understanding of mortgages. Building a new house is a different kettle of piranhas however. It is a difficult and prohibitively expensive process, therefore very few people actually build their own home. Just think to yourself; how many people do you know who bought a house? And how many do you know who built one?

Because it is so rare, most people are unaware of what is involved. While I am just an Architect and would always advise someone to seek expert opinion from a financial advisor or a lawyer, there are several issues I have seen my clients confront.

Maximum Budget:

It has been my experience that, regardless of how wealthy the borrower is, the bank will set the upper limit on how much money may be spent on construction of a new house. they do this using a simple calculation, for example;

Cost of site = £100,000

Likely sale value of finished house = £500,000

Maximum construction budget (sale value - site cost) = £400,000

Understand this isn't the amount of money the bank will lend, it's the overall amount of money they will allow to be spent. In total. Regardless of the personal wealth or assets of the client. 

This ensures that if the bank has to repossess the house during construction, they will make back the money required to finish construction when they sell your home.

So if you want to build a multi million pound home, these are your choices; Either buy a site in a very desirable location and borrow to build or pay for the house entirely in cash without borrowing a penny.

Loan to Value:

Even before the recession, at the height of the property bubble, lenders did not throw money at developers and private clients. 75% loans were the norm then and now. The bank will also not lend money to purchase the site, that must be paid for in cash. Neither will the bank lend money to pay professional fees; lawyers, stamp duty, planning application and Architects Fees must all be paid in cash.

The real nightmare scenario happens if property values fall during construction of the house. The bank will re-examine the loan to value ratio, which will have changed; if the value has dropped, so must the amount of loan. But the builder still needs to be paid and the cost of materials and labour wont fall overnight. This means the client must find the money themselves, in order to finish the house.

CML:

The Council of Mortgage Lenders is the industry body that represents all lenders in the UK. They take a particular interest in one-off or self build houses. The story goes that in the downturn of the early 1990's many lenders repossessed homes that turned out to be vastly different, and inferior, to what they thought had been built with their money. When these lenders came to sell the repossessed homes, they lost a lot of money on them. It seems that back then, a self builder or wealthy client could self certify their mortgage application for a one-off house. With hindsight, this was an invitation to fraud. 

To prevent this from happening again, the CML have introduced the Professional Consultant Certificate, which is designed to give independent oversight of the project. This is done at the borrowers expense, for the banks benefit. 

The certificate can be signed by a Chartered Surveyor or an Architect. The certifier must have the correct Professional Indemnity Insurance and must agree to keep that insurance for a minimum six years into the future. The certificate is intended to act as a guarantee to the lender that the house is the same as on the approved plans, is built in the correct location and constructed to acceptable standards. It is not a replacement for the NHBC or similar schemes. 

The lender will require an insurance backed warranty before handing over any money for the build. In practice this will be done in stages, following an inspection by the certifier.  

I offer CML certification as a service to my clients, I usually charge around 1% the sale value of the home. This is to cover my increased insurance premiums into the future as well as my time in carrying out inspections. 

If you are have spent years watching Grand Designs and dreaming of building your own place, I am sorry for bursting your bubble. On the other hand, if you think you can deal with all of these issues, get in touch.

The Real Lost Generation

Since the start of the Great Recession there has been much discussion about the lack of opportunities for younger Architects, particularly graduates. The architectural media have taken to calling this group the lost generation, because they are leaving the profession to earn a living elsewhere and, once gone, will find it very hard to return.

I have real sympathy with this group, particularly when I get sent CV's that almost beg for a chance to work. It was nothing more than good economic luck that I was able to establish my own career in good times and had no difficulty finding a job. This isn't the first time, nor will it be the last, that Architecture has lost a generation of graduates. This also happened in the early 1990's and is probably a symptom of every economic downturn.

There is a another, hidden, lost generation within the Architectural profession however, who's presence is seldom discussed and who's impact isn't fully understood. Unlike recession graduates, this generation is unique; having lived through a huge change of culture in the profession, without actually having participated in that change. Let's call them the Anti-CAD generation.

CAD, short for Computer Aided Design, is the generic name for any software programme that allows drawing to be done on a computer. CAD was introduced in the 1980's and coincided with the digital revolution, moving every paper based activity into the digital realm. This revolution has been so far reaching that most Architecture practices today are indistinguishable from any generic office, full of PC's. The drawing board is practically extinct in the todays profession.

The Anti-CAD generation will have entered the profession sometime before the digital revolution, making it's members at least fifty years old today. The youngest members of this generation would have been in their late-thirties when CAD was adopted as the industry standard. Most were at a stage where they were senior enough not to need to adapt, as there would have been younger Architects and technicians to do the drawings for them. This generation went on to found or take over the running of well known firms. They are today's generation of partners, directors and senior lecturers at universities. They are the leaders of the profession.

In the years before I started my own Architecture Practice, I worked for five different firms. They were all very different from each other but they had one thing in common, not one of my former employers could use CAD and some couldn't use computers at all. Not even email! One director used to compose all his letters in a single word document, each for different jobs or clients, one after the other on one file, creating chaos as he went. This may be my own individual experience but I know it's not unusual.

So how important is the method used to produce a drawing? does it matter whether an Architect is computer literate? Lets make clear that I am not saying every members of the profession over the age of fifty is a techno-phobic Luddite. I know many older Architects who have embraced digital media and who regularly teach me things, they don't qualify for membership of the Anti-CAD Generation. I'm also not trying to make a value judgment between digital drawing and hand drawing, for the record, I enjoy hand drawing. I always sketch out designs before drafting them using CAD (I use Q-CAD Professional as my drafting software) I also believe that it is best to learn to draft using a traditional drawing board first, later transferring the skills to a computer. 

What I am trying to do is to identify an unprecedented situation in my profession, where a clash of culture has emerged because of a lack of shared experience on either side of the generational divide. 

The real importance of the Anti-CAD generation is that they presided over this change of culture, from hand drawing to computer drafting, without participating in that change. For the first time, those who ran the business could not do the business. For centuries, the partners or directors of a firm could, if necessary, use a drawing board as well as their staff. This culture of continuity, where the master had greater skill than the apprentice, was challenged because the apprentice had acquired an entirely new set of skills the master did not have. The opportunities for inter-generational knowledge transfer were reduced as a result.

This lack of shared experience has been corrosive to mutual respect. Younger Architects can be very dismissive of older colleagues who don't interact with the digital world, this is a mistake and a lost opportunity to learn from more experienced professionals. Many older Architects I know need the skills younger members of the profession provide but at the same time appear to resent the situation. One elderly Architect I knew described it as feeling impotent. I cant imagine the chances of promotion being that great if the boss resents your skills to such an extent. 

This is the real Lost Generation, a period from roughly 1990 to 2020, by which time the majority of the Anti-CAD Generation will have retired. I hope the next generation to lead the profession will have far more in common with those younger than them.

Demographics: Who Employs an Architect?

Just out of curiosity, and for want of something interesting to do, I decided to work out the demographic break down of my clients over the last three years. 

0f a total number of 105 projects, I discounted all commercial jobs and only counted repeat clients once. This left me with 80 domestic clients, which I broke into three groups; Single Men, Single Women and Couples – so far, so good.

It gets more complicated when thinking about age, as its not something I ask my clients. Also, how do you describe the age of a couple if there is a significant age gap between the partners? In short I had to guess at an approximation for age.

I realise all this isn’t accurate, but that misses the point.

The main group that has employed my services over the past three years are couples, accounting for almost three quarters of all my domestic clients. Of that group, 38% were in the 30 – 40 age range. These clients typically have young, and growing, families. They are the classic Improve Not Move client. 

And what about the singletons? A much more even spread, with the majority being over 40. 

So, if you ever wondered what kind of clients employ an Architect in Edinburgh, now you know. 

3D Printing

When I was an architecture student I used to make models all the time. Every project was built up in card, plastic and balsa wood, it is a great way of explaining a design. By the time I graduated I was really good at making models. Then I started working in the profession and haven't made a model since. The amount of time required to make a complex model is seldom justified by the fee. Before starting my own Architects Practice, I worked at three different practices in Edinburgh and any models I saw there were almost always of multi million pound developments and were outsourced, rather than made in house. Models of small, domestic projects are as rare as hens teeth but this might be about to change thanks to the availability of affordable 3D printers.

I have know about 3D printers since I was a student, they were complex and very expensive and mostly used to rapid prototype industrial designs; pumps, valves and the like. The initial cost of the printer could only be justified if the end product was mass produced. This is the opposite of the Architctural process, where each product is a unique prototype.

I heard about it again in a February 2011 edition of TheEconomist, it seems the boffins have been busy and come up with a variety of 3D printers for under £2000, putting them within reach of ordinary people and small businesses. The Economist believe this may herald a new industrial revolution, with designers making new and improved products available online for you to download and print at home. The idea of a grassroots movement that can change our fundamental assumptions must have been one of the biggest stories of 2011, with the Arab spring and the Occupy movement, but it is also generating big interest in the design community. 

My own interest stems from the apparent ability of 3D printing to allow me to quickly and cheaply make models of modest domestic projects. I have researched the market and can see a number of viable options;

Maker bot 

UP 3d 

Bits from Bytes 

This is a video of the MakerBot printing out a model of a Gothic Cathedral. 

Despite being more expensive, UP would be my personal choice because it has the ability to print in higher resolution. Check out this video of one printing a ball-bearing race, for example.

As well as the immediate use in my business, this would allow me to pursue product design as a sideline. Given that it takes months and usually years to build even a modest project, having the ability to rapid prototype at home could lead to all sorts of new opportunities.

So if anyone feels like buying me a present, you know what to do.

The Great VAT Divide

Since starting my own Architecture practice three years ago, I have worked almost exclusively on new-build houses, extensions and conversions for domestic clients. While each project is unique, there is one important criteria that divides all construction projects into two groups; those who pay VAT and those who don't.

Given that VAT is currently 20%, this could mean the difference, for some clients, between deciding to build or not. This would be bad enough if all construction projects were treated equally, but they are not.

If you build a new house, the builder can claim back all the VAT when the project is complete.

If your house is listed by Historic Scotland (or English Heritage) any new work is zero VAT rated. 

However, if you own a normal house (as most people do) and you want to build an extension to it, then get ready to pay an extra 20% to the taxman for the privilege. 

Given that building anything is expensive, most people will do it only once, therefore most people are unaware of the VAT rules that apply. When I explain the rules to my clients, some of them are outraged at what they see as an unfair tax that favours a wealthy minority at the expense of the majority of homeowners. I tend to agree and if more people were aware of the discrepancies, I suspect the rules would be changed. 

I don't charge VAT on my own Architects Fees and I am not qualified to give advice on tax matters. I always encourage my clients to take expert advice from an accountant, or phone the HMRC helpline, if they are in doubt. I do think the system could be made simpler and fairer by having one universal VAT rate for all domestic construction.

The depth of confusion this causes is best illustrated in listed buildings, something I blogged about back in 2009, in summary, zero VAT only applies;

1.If the building is being used for residential purposes and not commercial. 

2.Only work which is deemed an improvement or upgrade may be zero rated, repairs are not included in the work. 

3. Only work which is specified in the Listed Building Consent is included in the scheme, each item of work described will be zero VAT rated when the application is approved. 

Between this and the VAT rebate for new-build houses, it really does seem that the tax code is not the result of joined up thinking. At present the VAT rules penalise ordinary homeowners who want to accommodate their growing families. It also works against preserving our historic buildings, making it more tax efficient to completely rearrange a listed building than to repair it. This system is unequal in its application and I would prefer to to see VAT reduced to zero for all domestic work.

In the current economic climate, cutting any tax is difficult but I suspect there may be several benefits to placing house extensions on the same VAT rate as new-build houses and alterations to listed buildings. 

Firstly, extensions usually cost less than building a new house and are easier to fund because banks can use the existing house as collateral. This makes house extensions one of the most common form of domestic building work and a bedrock of the UK construction industry. Most builders I know, who were building multi million pound developments a few years ago, are now building extensions worth £30k - £70k. This 'bread and butter' work is currently keeping many builders in business. Taxing this work places skilled jobs at risk, it also encourages unscrupulous builders who work for cash in hand. This is a double blow to skilled, well organised building companies; discouraging homeowners to build extensions and encouraging cowboy builders who give the entire construction industry a bad reputation.

Secondly, the social impact of house extensions are generally positive. It allows families to remain within communities where they are already established. Homeowners who extend add value to the existing housing stock and take pressure off the housing market. While most commentators agree the UK needs more new homes, it is cheaper and quicker to extend existing homes. This won't solve the housing crisis but it will reduce the need for larger, new houses.

Finally, the moral argument; those who can afford to build a new house or to own an historic, listed building tend to be wealthier than the ordinary homeowner. The current VAT rules favour the wealthy at the expense of the majority. There should be one rule for all. 

Let There Be Light

Back in early 2010, I was approached by a client who owned a sub-basement in Edinburgh's New Town. For those of you who aren't familiar, a sub-basement is one level under the regular basement! The floor level of the property was five meters below the street but because much of the New Town is built on a slope, the ground is higher on one side and lower on the other, so the rear of the property opened directly onto a communal garden. 

The property was large, over 80 square meters and had several rooms, including a kitchen, utility, bathroom, living room and two large box-rooms. However, the Building Standards require a habitable room to have windows which provides both daylight and ventilation. The standards set a minimum size for these two requirements as a ratio of the rooms size, the bigger the room, the bigger the window.

If you are curious, the ratios are 1/15th for daylight and 1/30th for ventilation. So a room of 15 square meters (a reasonable double-bed room) must have a window with at least one square meter of glazing and at least half a square meter of that window must be openable to allow ventilation. This only applies to what the Building Standards call 'Apartments', "a room in a dwelling not used solely as a kitchen, store or utility room"

Under the regulations, the client's flat had only one Apartment, its living room, which had a patio door opening onto the communal garden at the rear of the property. The two large box-rooms on the street size of the flat had only one tiny window each, with about about as much glass as a microwave door and neither was openable to allow ventilation. Here were two potential bedrooms but, legally, they couldn't be used as such.

The client commissioned me to resolve this and, following a Feasibility Study, we decided to excavate two external alcoves outside the existing tiny windows. We could then install openable glazing of the correct size into each alcove and the box-rooms could be classified as bedrooms. 

You can see from the cross section below, that this excavation was not straight forward. The proposed external alcove is highlighted in yellow.

For starters, the title deeds describe my clients land extending as far as the street but the surface of the ground was owned by the upstairs neighbour. We were able to secure the neighbours consent for the work, without which it might have been possible to get all the necessary approvals but we could never have built the alcoves without access over their property.

Secondly, there were structural concerns, to avoid accidentally demolishing five stories of 200 year old, Grade A Listed, World Heritage site, we decided not to widen the existing window openings. Known as cutting down a window, this is a trick of the trade that saves money, as well as structural gymnastics, by keeping the existing window lintel in place. The next problem was ensuring the new alcove didn't collapse under the weight of the surrounding ground. Finally, where would the rainwater go? We had to connect the alcove to the drainage system, otherwise it would flood!

The construction drawing below shows the level of detail required to make all of this possible.

Before any of this could be built however, there was the small matter of successfully applying for Planning and Listed Building consent. 

During this process, details of the type of new sandstone were agreed. Because the original quarry from which the New Town was built has long since closed, a close substitute had to be found. Eventually it was agreed to use Peakmoor sandstone, from Derbyshire. We also had to get samples of the type of metal work we intended to specify and have this approved as well.

Curiously, there is no specific regulation for the type of metal grill that should be specified in this situation. I imagine walking over this in stilettos would be challenging but we consulted with the neighbour and got her approval before installing it.

When Planning and Listed building consent had been granted, we prepared and lodged a Building Warrant application. We worked with McColl Associates, Structural Engineer, who have experience in this type of project, to design the technical details. 

The client was keen to have the project built by a competent building contractor but also wanted the construction cost not to exceed the anticipated increase in the value of the property. This is an almost impossible request to consider and it was only because the site was in such a prestigious location that it was possible to do so. Had property prices been lower, then the cost of construction would almost certainly been greater than the increase in value.

I organised a competitive tender process, asking five contractors to participate, with the outcome being judged on a mixture of references and price. Eventually S. Ewing and Sons won the contract.

Work took three months to complete and was only delayed for one week, due to the discovery of a larger than expected manhole direly next to one of the alcoves. 

The alcoves were dug one at a time and safe access was provided to the upstairs neighbour at all times. All the digging was done by hand, as there wasn't enough room for machinery. The stone blocks of the external wall were much larger below ground level than was anticipated and required serious effort by the contractor to cut down.

During construction we discovered the drainage ran in the opposite direction than was originally thought but a solution as found to allow the alcoves to drain rainwater efficiently.

This project was also one of the first in Edinburgh to benefit from the new guidelines on double glazing in historic Listed Buildings. We were allowed to install Slim-Line double glazed, timber frame windows, where the glazing is only 6mm apart and resembles traditional single glazing. 

This project, although modest, was one of the most technically challenging I have yet taken on and the result is good. The project was delivered within the time-scale and budget envisaged and the client is delighted. If anything is shows the value of consulting with an Architect before considering such a project.