How do Architects charge for their work?
There are three ways in which Architects can calculate their fees; a percentage of a total project cost, a fixed price lump sum or on a time charge basis.
How much or how little you commission an architect is up to you. Because there are clear stages it is easy to have clarity on how much involvement you want from them.
In this method, an architect’s fees are expressed as a percentage of the total construction cost. Before fees can be estimated, client and architect need to establish the services to be provided, the approximate construction budget and the nature of the work.
Lump sum fee:
This type of fee will be very carefully defined based on specific items of work. The fee will need to be renegotiated if the nature of the appointment changes significantly. This approach may, therefore, be best for a straightforward project with a very clearly defined brief.
A time charge route can provide flexibility with a ‘pay as you go’ approach when used. This option offers the least fee certainty for the client, so often an architect will estimate the total number of hours required or agree hourly caps.
How much do Architects Charge?
Architects’ fees in the UK can vary depending on the location, complexity of the project, and level of service expected. It is usual that an architect’s fee can range from 5% to 12% of the overall construction cost/budget. The difference depends on the complexity of the project, its similarity to existing projects, and whether economies of scale can be factored in. Contrary to what you may expect when asking how much architects fees are, fees are generally lower for new builds than for extension projects since extensions are more complex as they must interact with an existing building structure.
For a two-storey extension project which comes in at £150,000 for the finished build, the cost for an architect charging a 10% fee would be £15,000.
Why do fees vary?
Fees are generally lower for new builds than for extension projects, since extensions are more complex as they must interact with an existing building structure. Listed building or any other specialist factors will also incur a higher fee, as more work is required to get the necessary approvals.
Ultimately, as a professional service, an architect is billing for their time.
A schedule of services will be provided along with the fee proposal, this details the items of work that are included and also gives exclusions. Architects will generally breakdown their fees to assist with business cashflow.
If a client requires additional services after appointment, these can be time charged or a separate fixed fee agreed. An architect must, of course, obtain a client’s consent before providing any such additional services.
Clients are sometimes concerned that a percentage approach does not give architects an incentive to keep construction costs low. However, architects offer a professional service and are bound by their code of conduct. This code is issued by the Architects Registration Board. It requires architects to be ‘honest and act with integrity’ and to ‘be trustworthy and look after your clients’ money properly’.
Architects Fee benchmark
In the past, The Royal Institute of British Architects (RIBA) provided the Architects Fee Scales, a comparison that you could refer to, based on the type of project.
The RIBA now do more generalised benchmarking. The average charge-out rate per hour for an Architect in the UK with over 5-years experience is just over £80. Average percentage fee for projects within RIBA stages 1-7 (design to delivery) for a new build project with a budget of £1m is 6% of the total construction value, giving a lump sum fee of £60,000.
What will other consultants charge?
Other consultants’ costs will range in the same way architects’ costs do, in relation to the size and complexity of the job but will be lower than an architect’s fee reflecting the amount of input required from them. For example, if an architect’s fee was 7%, a structural engineer may charge between 2-2.5%, a cost consultant between 1.5-2% and a services engineer 1-1.5%.
What do I need to budget for?
Construction cost and overall budget for the project are not the same. The overall budget will include all professional and legal fees, the statutory charges for applications for planning consent and building control, a contingency sum for unforeseen events and other costs such as furniture, equipment, land acquisition, finance charges and VAT, in addition to the construction costs.
Although VAT is typically not payable on the construction cost of a new house, VAT is still payable on architects’ fees and for all other consultants involved in the process.