Recommended Payment Schedule for a Build

It is important that the payment schedule works in both the builder’s and the customer’s interests. The customer should see progress each step of the way, with visible evidence of where the money is going. Likewise, a builder needs to receive payment to cover materials and labour along the way. The payment schedule recommended below allows for both. This is not set in stone, and other builders may follow different schedules, I am purely outlining the schedule that I have found works well for me and customers likewise find reasonable.

10% deposit to secure your slot. I appreciate not all builders request a deposit. Personally, this gives me the guarantee that the customer is not going to pull out at the last minute and means I secure the start date for the customer. It also covers the initial materials and machinery I will need to pre-book and have delivered to site for doing the foundations.

15% to be paid once engineered out of the ground to DPC, covering all footings, engineering and oversite.

25% to be paid at wall plate level with all block work, brick work and wall insulation complete

20% once the roof is complete (house should now be fully protected from the elements!)

10% after first fix electrics and plumbing

10% when dry lining/plasterboard is finished

5% when second fix electrics and plumbing are complete
N.B. Any snagging should have been completed by this point too, so I would not recommend making this payment unless all agreed snagging is complete as well.

Remaining 5% only to be paid once your electrical certificate has been registered with building control and they have issued your building certificate.

Some important notes

What’s included in your quote?

With a build it’s really important that the customer reads all the detail in their quote to be sure what is and isn’t included so there are no misunderstandings with the builder. The customer understandably may not know the difference between a shell build, or what 1st or 2nd fix actually mean. Therefore it’s important to read the fine print and what will be included. For example, if the quote doesn’t include skirting, architrave and hanging of doors, this will be up to the customer to sort themselves afterwards. So be really clear on what finish you expect. I’d recommend asking your builder to really spell out exactly what will still be left for you to finish yourself once they’ve done their bit, so your expectations are clearly managed here.

Cash payments

Builders are often asked by the customer if they will accept some payment in cash in order to save the VAT. This is not something I would recommend because:

  • Any cash work is not covered by your home & buildings insurance
  • Any cash work is not covered under the builder’s warranty
  • You therefore have no legal come back if you are not happy with those aspects of the build – there is no proof that the builder has done those works for you
  • Consider what happens if your builder goes AWOL and you’ve handed over a wad of cash….?!?! I’ve heard so many horror stories about this…..for sure, don’t hand over cash for your initial deposit!!!

Change in requirements

Let’s face it, we change our minds sometimes. We may want a different skirting board, we may not like the colour of paint we chose, we may want to move some of the electric points or have different lighting, we may not like the flooring we’ve chosen…. Not everything is easily to visualise, so until we see the work done we can’t say for sure if we like it. I for one understand this. After putting up the wall paper in our lounge, my wife decided that, nice as it looked on the roll and sample, it didn’t achieve the required effect in that particular room. So, we took it down and changed it.

Most builders appreciate this and understand at times customers may want to change something and most will do their best to accommodate. This is fine provided there is understanding on the customer’s side that it’s not the builder’s fault if the customer doesn’t like what they themselves have chosen. It should also be understood that making changes has an additional associated cost – both for materials and labour – and this will also most likely impact timeframes too. As long as there is mutual understanding of this, and agreement between builder/customer on the additional costs and timeline variances, then most builders should be happy to accommodate changes (albeit a little frustrated if they’ve just completed something and have to rip it out again!!!).

However, in some cases depending on the change required and the stage of the build, this may not be possible. For example if you are wanting to move the location of a plumbed item (toilet, radiator, sink etc…) but the piping has already been put in to accommodate the intended location, this is then not a simple task.

I would highly recommend visiting showrooms and other houses to see in reality the different products you are choosing, rather than visualising through brochures or websites.

There is nothing more satisfying for me than seeing a customer delighted with their build. I personally would rather work with the customer to make changes where required so they get exactly what they want and love the finished product, even if what they want changed slightly along the way!

Speed of decisions

It is therefore highly recommended that the customer is frequently on site checking the progress through the build to ensure they like everything being done. If something needs changing, it is much easier to manage this along the way rather than rectify items at the end, particularly as for some changes it may be too late by then.

The builder needs the customer to make speedy decisions, and builders love decisive customers! Customers should do their research early so they are ready for the builder to move forward with their chosen products.

The builder will specifically request that customers are on site at particular stages of the build to discuss any preferences and agree snagging. It is important that the customer allows time for this promptly else timelines may be impacted if the builder cannot progress or finish due to pending feedback and decisions from customers, or awaiting products that have a 6 week delivery for example.

Additional Work

Often as the build progresses the customer asks for additional things to be done or added – this is quite normal, be it additional electrical points, hanging of doors, tiling, decorating etc… that weren’t part of the original quote and payment schedule. If additional work is added that needs to be slotted in to the various stages of the build or added on after, bear in mind this will likely push back the overall timelines. New timeframes, costings and payments schedules for the additional work should be communicated by the builder to manage expectations. However, additional work commissioned should not impact the payment schedule already agreed with the builder for the initial quoted work. For example, once you have your building certificate and everything on the original quote is finished including snagging, the builder should receive payment in full. Payments should not be held up by the customer waiting for completion of any additional work requested separate to the original quote.