Building an item-by-item estimate

Block	Items to cost
Land	purchase price, servicing, duties and deed costs
Construction	works, from shell to finishes
Design	design team fees and specialist appointments
Formalities	costs of permit and procedures
Connections	services from boundary to building
External works	access, adjoining surfaces, boundaries, water management
Contingency	uncertainties and variations
Financing	loan and security costs

Each line is costed separately. An item left empty must stay visible, at zero and justified, rather than deleted from the framework.

Four steps, in this order.

Cost the land in full first, acquisition, servicing and deed costs, since it is the heaviest and most variable item.

Then cost the construction from the area and a dated range per square metre.

Cost the ancillary items one by one, without applying a blanket percentage that would mask omissions.

Add the contingency last, on an already complete total.

The reverse order produces an estimate that seems to hold until the land is brought in.

A point distinguishing a professional estimate from an addition. Each item carries its assumption and its uncertainty.

Contingency is calculated on the total, not on the construction item alone.

It decreases as the project takes shape. High at an early stage, it reduces once tenders are in, without ever disappearing before handover.

It is not consumed in advance. Contingency used to fund an improvement to the brief is no longer available for the uncertainty it covered.

It is distinct from a comfort margin, which is a personal choice rather than a methodological requirement.

Four checks, to apply before issuing an estimate. They cover the scope, the date, VAT and contingencies.

The weight of ancillary costs relative to construction cost, which must sit within the observed order of magnitude, as the article on ancillary costs and their weight recalls.

The internal breakdown of the construction item, whose inconsistency signals an incomplete scope, covered in the article on breakdown by trade.

Total cost per square metre of living area, the only quantity comparable between projects.

The date of every figure used, none of which should come from an undated source.

A failed check does not mean the estimate is wrong, but that an explanation is needed.

Three milestones, with a fixed estimate between them. They mark the moments when the estimate is revised.

At sketch stage, once form and area are settled.

Before tendering, when the project is defined but offers are not yet in.

Before commitment, incorporating the offers received and reducing the contingency.

Between two milestones, the estimate does not move. An estimate changed continuously loses its function as a reference and makes any drift undetectable.

Two limits.

It does not replace measurement. Quantified description of works and comparison of offers belong to the guide on measurement and specification.

It does not replace checking the applicable tax schemes, which may materially change the amount actually borne and belong to the corresponding guide.

Four rules.

Use a fixed framework, whose empty lines remain visible.

Date every figure and cite its source.

Calculate contingency on the total, and document it separately.

Update only at milestones, to preserve a basis for comparison.