3 hidden costs in home construction that are not included in budgets


When constructing home, it is difficult to stay on budget. There are lots of hidden costs involved that are usually not included in the budget.

1. Soil and contour test


Before giving a fixed quote for building your home, builders will do a soil and contour test. These two tests can cost from $14,000 to $20,000. In a soil test, surveyors drill 3 holes in your property and analyze the soil. If the soil is rocky or has any other problem, then the cost of constructing home will increase. The contour test survey of the land and gives report on the slope of the property. A sloped property will result in extra costs.

2. Site Costs


This is the largest hidden cost involved in constructing home. The site cost depends on the results of your soil and contour test. If the soil is of poor quality and the slope is greater, then the site costs will increase. If you have to remove lots of trees from the site to start the construction process, then there will be extra cost. Site costs vary from $10,000 to $ 70,000.

3. Interest repayments during construction


Even if your property is under construction, you will have to pay the interest on the loan you have taken for the property. So, this is a major hidden cost that is not included in the budget. The amount of interest varies according to the size of the loan, interest rate and scheduled payment terms.
You should be prepared for these extra expenses when you start building your home. If possible, you should include these hidden costs in your budget so that you don’t have difficulty in providing these fees later on.

Factors that affect the cost of building a new home


If you have a detailed budget plan, it will help you to assess the financial feasibility of your project. Bankers often want to see this budget before they release your funds. Several factors determine the cost of building your home. There is cost of architect, project manager, construction materials, fixtures and fittings, etc. Even the neighborhood you live in affects the cost of building your home. Here are some of the factors that will affect your cost to build a new home.

Quality of the specification

Build quality can be of three levels: standard, good and excellent. Standard is the most common level of specification. Quality has effects on the cost of fittings and finishes.

Level of involvement

If you can do some of the works by yourself, then you can reduce average costs by 15%. About 50-60% of the total build cost is labor. So, doing some works by yourself can reduce costs significantly. Works like laying floors, fitting kitchens and bathrooms, landscaping, etc. you can do by yourself.


As the size of home grows, the fixed costs affect the budget less. As a rule of thumb, costs per square metre decrease as the size of the house increases. This is because the cost of building more volume does not proportionally increase the cost of materials and labor.

Sloping sites

Building costs of a sloping site will be more as more work is involved in building house on a sloping site. As a general rule, each 50 of slop from ground will increase the build costs by £5,000.

Plan, shape and layout

The walls, doors, windows and wall finishes are affected by the area and shape of the building. For example, a square building is more economical than an oblong building.

Design and build

The external walls of your house represent 15% of the total construction cost. So, the type of maaterial you use for your external wall affects the cost of construction significantly.

Roof covering

The type of roof covering has huge impact on the construction costs. Tiles that are made of slate, clay or stone require more tiles per square metre and so are expensive.

When creating budget, you need to include the design fees, supervision fees, legal fees, stamp duty fees, etc. The actual cost of construction may vary from the estimated budget. But if you have a detailed budget in place, the variation won’t be much.