Hi Steffie,
Regarding architects costs being higher than your budget are you talking about the service costs of the practice or their estimated costs of the build that the practice is providing?
I have been a similar situation when i did my side return, back extension and loft and this is what i have learnt to save costs:
* Main priority is to spend on the build and that includes glass, flooring, undefloor heating etc as this requires major upheaval and cost to re-do. Cut back on things that can be changed later and outdate like appliances, kitchen cupboards (you can replace the doors later) and furniture to fill spaces.
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Architects are an expense, however an architect can add value by planning spaces, adding coherency to the spaces and being up to speed on planning rules and building control. If budget is tight, you can use the architect to the stage of building control drawings and then do the tender with contractors yourself. For the drawings to this stage you might be able to negotiate a flat rate if your vision of costs of the project is different to theirs. You might need to keep talking to a few more practices.
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Party WallIf you are in a terrace you are going to have to get a party wall agreement in place, this an expense you can avoid by doing it yourself (for 2 neighbours awards with a surveyor can be around £5000, if your neighbours are subdivided into flats then more). Your neighbours have a right to appoint a surveyor, however if you go the website :
https://www.gov.uk/party-wall-etc-act-1996-guidance and download their templates you can write your own letters for party wall agreements, take the photos and pay nothing! Most people don't realise a party wall can be done for FREE. Unfortunately the party wall thing has become a bit of a scam for "some" party wall surveyors who monitor council sites for planning applications and send your neigbours letters using scare tactics saying their house is at risk unless they sign the enclosed form and have you pay all the costs. Best to go visit your neighbours show plans before they go to planning permisson and inform them about the party wall act and how you would like to deal with them directly and not through a surveyor.
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BuildersFor the builders, get at least 5 quotes from reputable companies and you can save money by project managing yourself (if you are up to the task) and using subcontractors as a main contractor or package build company will have a project manager factored into their costs. Your architect can issue a schedule of works for the build (additional cost) which will itemise every component of the build, it is worth doing as this is where a lot of budget leaks occur as builders will guestimate things at a higher price without detail and unless you have construction experience items might be missed off the quote and then will be added while you are in the build and you will be over budget. If you are on a very tight budget try getting a fixed price contract for labour and building materials so you have more visibility before you start with the budget. Also try and think of everything you want to do as changes during the build as this can also be costly.
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Budgeting, spend time doing this upfront and make sure you include everything no matter how small, it is the small things like plug sockets that really add up (they might be £10 each but you need 30 of them!!!). Don't forget VAT as suppliers/contractors always quote without.
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Fixtures and Fittings This is a large chunk of your budget and ways you can save money here are asking your builders to buy for you using their trade accounts (many builders get substantial discounts for kitchen cabinets, bathroom fittings, lighting and electricals). Also worth visiting ex-factory, clearance stores, CP Hart has a great clearance shop through a secret door in their Waterloo showroom with rooms full of cancelled or ex-showroom orders at 50% off or less. Also with buying fixtures and fittings simply ask for a discount and you could get 5%-20% for being a bit bold here (something i learnt from my mother).
Hope this helps