Why Builders' Quotes Vary So Much, and How to Compare Them Like for Like

Seven reasons builders' quotes vary so much

Most of the gap comes from seven places. Each one is legal and common. Each one has a fix on your side.

1. Different assumptions. Where the drawings are silent, each builder guesses. One assumes new plaster throughout, another assumes patching.
2. Exclusions. Items left out of the price, listed in the small print. Skips, scaffolding, decoration and building control fees are common ones.
3. Allowances. Provisional sums for work nobody has designed yet. A low allowance makes a quote look cheaper but moves the risk to you.
4. Preliminaries. The cost of running the site: management, welfare, scaffold, waste and insurance. Some price them properly, some barely at all.
5. VAT. A builder below the VAT threshold does not add VAT. That can make a quote look a sixth cheaper.
6. Risk. An old building hides surprises. Some builders price that risk in; others leave it out and hope.
7. Workload. A busy firm prices high because it doesn't need the job. A quiet firm prices keen to keep its people working.

We price risk too. In our quotes you will see it in the allowances and the qualifications, written out, so you can challenge it.

VAT: why one quote can look a sixth cheaper

A business must register for VAT once its taxable turnover passes £90,000 in a 12-month period, according to GOV.UK. Many small builders work below that line. Their quotes carry no VAT.

A VAT-registered builder adds 20% on top. So £200,000 plus VAT is £240,000. A non-registered builder quoting £200,000 looks £40,000 cheaper. The work behind both numbers may be identical.

What a complete construction quote contains

A quote you can compare has the same parts every time. If any are missing, ask for them in writing before you go further.

Checkatrade's Renoflation report found that only about a third of people get a written quote for jobs over £500. It also found that 41% said the final cost was higher than the quote. A written, itemised quote does not stop every increase. It does show you where the increase will come from.

How to level quotes like for like

Levelling means adjusting each quote so every total covers the same work. Quantity surveyors do it routinely on commercial tenders. You can do a simple version yourself.

Put the quotes in columns and the trades in rows. Where one quote leaves something out, add a fair figure for it. Where an allowance looks low, raise it to a realistic level. Then compare the adjusted totals.

Read the result. Quote A was not £60,000 cheaper than B. Once levelled, it is £11,000 dearer. Quote C is still the highest, but now you can ask it why, line by line.

Red flags in a construction quote

Some quotes are low because the builder is efficient. Others are low because the hard parts are missing. These signs point to the second kind.

1. One line for the whole job. You cannot see what is in it, so you cannot compare it.
2. A long exclusions list. Especially items that are plainly needed, like scaffold or waste.
3. Round, low allowances. "Kitchen: £5,000" on a high-end home is a number, not a price.
4. No preliminaries line. The site still has to be run. The cost will come back later.
5. "Subject to survey" everywhere. Fair on an old building, but it should come with a plan to firm up.
6. A big deposit with no breakdown. Ask what it pays for: ordered materials, bespoke items, the start date.
7. Pressure to sign quickly. A fair price will still be fair next week.

None of these proves bad faith. Each one tells you where the final price is likely to grow. For how low prices are made back after you sign, read our guide to builder overcharging. For allowances in detail, see provisional sums in construction.

Commercial tenders: a simple tender report

On a commercial project, the comparison should end in a short written tender report. It protects you, and it gives your lender or board a clear record.

1. Compliance. Did each tender price the documents issued, on the form asked for?
2. Levelled price. The adjusted totals, with every adjustment explained.
3. Programme. Start date, duration and any long-lead items.
4. Qualifications. Every condition the contractor attached, listed in full.
5. Risk. Which provisional sums and exclusions stay with you.
6. Team. The named manager and the share of work done by the firm's own people.
7. Recommendation. Who to appoint, and what to clarify before signing.

Our guide to choosing a commercial contractor covers the checks on the firm itself. For a wider list of what to look for in a builder, read our guide to construction contractors.

Choosing the winner on more than price

On a competitive tender, the cheapest bid usually wins. That is exactly why some bids are cut to win. Our guide to cost plus contracts explains how that money comes back as variations.

So weigh four things next to the levelled price:

1. Scope. Does the quote price everything you asked for, in writing?
2. People. Who runs your site every day, and how much of the work is done by the firm's own staff?
3. Programme. Is the timescale realistic, or just attractive?
4. Terms. Payment against work done, after an agreed deposit, a clear change process and a proper contract.

About 60% of our labour is our own in-house team, so we can tell you who will be on your site.

When the gap is still too big

Sometimes the quotes still disagree after levelling. That usually means the design is not complete enough to price. More detail on the drawings or a written specification will close the gap faster than another round of quotes.

Whichever quote you choose, keep a contingency on top of it. We usually advise 5% to 10% of construction cost, depending on complexity.

If your quotes still don't make sense, start again from a complete scope. Want a builder who prices the whole job before you sign? Book a site visit. We take on construction projects from £100,000.