Builders putting prices up last minute, can I haggle?

[JudyGemstone]

I am about to do a loft conversion with work booked to start next weekend. Was quoted £47k last November.

End of last year got an email saying due to covid/brexit etc materials had increased so costs increasing by £4k or so. Not ideal but understandable. I could just about find this extra but it’s very tight and no contingency funds now.

Last week, so 2 weeks or so before start date I get another email saying due to situation in Ukraine/fuel prices etc costs will
be going up again by a further 15%!

I simply do not have any more money. The builders are coming out tomorrow morning for the pre start meeting. I feel like they’ve got me over a barrel and I have no choice but to try and put the rest on a credit card or something, but my dad reckons I should ask about balance of labour/material costs and haggle.

He sent me an article from a trade mag about how timber and steel prices have fallen for the 4th month running and basically thinks I should call their bluff.

I think that I need them to do this job more than they need to do it and so they have the whip hand.

Has anyone else been in a similar situation? Is it worth trying to negotiate? Don’t want to piss them off, but at the same time it does feel slightly like price gouging.

Its stressing me out!

We are also awaiting our loft conversion. We signed a contract last September, expecting to start in May/June but now likely to be September - November. Delays caused due to material availability, covid absences and demand. Our contract contains an indicative price, but we’ve been told to expect it to increase. There was no price guarantee available due to all the current issues. I can’t say that I am
massively happy about it but we need it done and even getting a quote was extremely difficult!

I would ask for absolute transparency on the increases to ensure they’re fair but it very unlikely you’d be able to negotiate.

@CellophaneFlower that is a deluded point of view. Sorry. I'm having an extensive renovation / extension at the moment. Raw materials have gone through the roof (I have a project manager so am buying the materials myself). Fair enough that they should hold labour rates off of their quote but you can't expect a builder to fund, buy and store all the blocks, steels, sand, timber, cement etc and that is what they would need to do. When I ordered our new roof tiles the builders merchant would only hold the price for 24 hours.

I have totally gone into this knowing that my budget is likely to be topped out and as a result are having to make some sacrifices on the internal spec. I wish we had built a year ago!

You can't expect a builder to make a loss on your job in the current economy though.

OP those increases sound about right I'm afraid.

Then they should make it clear from the outset that their quote is in fact an estimate. After already asking for an increase, asking for a further 15% 2 WEEKS before starting the work is taking the piss imo. But yes... they have OP over a barrel really, so I guess they don't have much choice.

Maybe didn't explain that well, if I quote for a job today and customer agrees, I can order materials at todays prices so they're ready for the job in a few weeks when I get to it.

If I quote today and customer takes a week to decide by then my material costs could have shot up so couldn't do it for original price.

I can assure you that they are not “taking the piss”. Most building materials are seeing double digit price increases every other month. Done more than that. The cost of Labour has also risen.

We did renovations recently. The signed contract quote was a fixed price. the only changes would have been for substantial unexpected issues that came up due to something onsite, like if they broke into a wall and found extensive black mold or something. You need to check your agreement.

One of the reasons we chose our particular contractor was because they source all expected materials for the job before beginning work which means we could mitigate delays after demolition and we wouldn’t be dealing with a contractor who went out to buy something planned mid-job and came back with sticker shock given how past prices were rising.

I'm quite aware of rising costs, my point is that people should be made aware that the price they've agreed is merely an estimate and they can expect it's unlikely to be what they'll actually pay. I can't think of many other examples where you'd agree a price but by the time you receive it it's massively inflated. I'm not quite sure why the customer has to absorb every penny of the increase in materials, which I'm guessing is often the case.

In any case, it can only continue for so long. People will end up unable to afford to have the work done and demand will drop I assume.

I doubt labour costs will fall, there's a scarcity of labour now and enough demand to keep everyone busy.

Thanks for all your comments, they’ve been earlier to discuss details and I’ve said that while I understand the difficulties and can extend my budget to accommodate some
increase, I don’t have much more funds available. I doubt many people have a load of extra cash at their disposal.

“If I posted on here that I was selling a house but prices had increased massively since I had accepted the offer, therefore I was going to ask for more money 2 weeks prior to exchange they'd be uproar! And yes, not the same situation I know, but the principal is similar. They've increased once, not your fault they didn't increase it enough. They should just suck this up this close to the build.”

This is exactly how it feels, like being gazumped! I don’t count that it’s genuine though, seems like a lot of people have had similar.

I did check that it’s the materials element that’s increasing and not labour, which they said it was. They’re going to send a requote tomorrow so will find out then exactly what the damage is 😬

*don’t doubt that it’s genuine

Hope it's not too painful OP and good luck!

We are slow diying ( looks like dying , not far off 😂😂 ) and we have noticed that prices are only going the one way - up , and by quite a bit. Builders are between a rock and a hard place . Try to keep costs down but a quote will almost rise within a few weeks . Could you come to some compromise ? Perhaps not have a high spec and go for a mid one to bring down the overall cost to you ?

Have you paid a deposit to them?

Who else do you think should “absorb” the increase then? Do you think the person doing the job should do it at a loss? Would you do your job at a loss? No you wouldn’t.

It wouldn't be a loss, it would be a lower profit margin. And yes, if I'd entered into a contract to supply someone something for a certain price I'd take the hit. I certainly wouldn't go cap in hand TWICE... I have morals and I'd be embarrassed. If I knew prices would likely go up I wouldn't put myself in the situation of offering a quote I knew I couldn't honour. I'd offer an estimate... or quote higher and stick to it.

Let's consider another scenario. Builder agrees a quote. During the 6 months before work starts, material prices fall (unlikely, but possible). Is he going to pass this discount onto his customer? Like hell would he... he agreed that price so he benefits. Should the customer, upon finding this info out, 2 weeks before the build demand a discount or refuse the job? Of course not.

I'm not suggesting builders should take the hit forevermore. They will raise their prices for future jobs to make up for their previous losses... that's how things work in other businesses. Not demanding more money after a price has been agreed.

@CellophaneFlower

a. They haven’t “entered a contract” and even if they had the builder could simply use “force majeure” to withdraw. Companies across the globe, including some of the very biggest are using this.

b. You clearly have no clue either how building work is priced or how much materials have gone up if you believe it would be merely a “drop in profits” for the builder.

You're right... I don't have a clue - unfortunately it seems, neither do they. Prices have been rising for ages now. It didn't happen overnight (well it did originally, but steadily increasing ever since) . Perhaps they need to learn how to price more accordingly, with things being so unsettled.

No point in getting a quote at all really, just book them for the work and hope for the best!

Just glad I'm not having any work done. I'd lose total faith in a builder who upped the price several times.

I think if they could do that with the level of confidence you seem to expect they would choose make a living buying and selling shares rather than sweating their arse off building your extension.

The supply chain is in chaos. Raising prices on glass, concrete, piping, bricks. Energy intensive materials costing more to make. Things are going up 200% in places. Depends on profit and risk contingency contractors have built in- they can't absorb all the costs. You may have to meet them part of the way. Or quite simply they'll go bust

@CellophaneFlower how you expect a small local builder to better predict wars, an energy crisis and the effects of storms in Texas two years ago on the chemical industry than any major economist (amongst other things like Brexit, let alone the pandemic), I don’t know. Prices of raw materials are increasing, in some cases daily, in double digit increments. Building products producers are struggling to keep up with what’s happening, let alone a local builder. It’s a crazy, unprecedented time in the building supply industry, globally. I think a local builder can be forgiven for getting caught out. You really do have no clue at all.

@BitOutOfPractice

This might blow your mind. There are some unscrupulous trades people out there (mad isn't it, in such an industry of honest people) who might take advantage of the current situation. They might even take advantage of the current demand, get offered a job they can earn more money from and shaft their current job. Shocking isn't it?

OP seems confident her builder is genuine, so that's great and I hope she doesn't struggle too much taking the hit. I just think if the situation is this uncertain they should be being totally transparent about it. Put in writing that their quote is subject to change due to rising costs. In the OP's case, her builder, when agreeing the first increase last year might have made her aware this could increase further. This would have given her more time to weigh up her options, could she afford to endure another increase, could she get another more favourable quote? Announcing 2 weeks before work is due to start leaves her little option but to suck it up. And yes, most people are aware of rising prices, but I'm guessing a lot assume once they've agreed a quote they're tied in. We all know a contigency is needed when taking on building work, however this is generally for unforseen issues with the actual build, not spent before work has even commenced.

However, I'm pleased to learn that since the world went to shit all the rogue traders went with it. We should just open our purses without question because of pandemic/war/energy/brexit etc.

I got the re quote through yesterday and it’s gone up about 6% overall so not as bad as it could have been.

i have a 0% credit card so will have to stick some on there if needed, which it probably will be.

They’re not an especially small company, said they have about 50 projects on the go currently, but it sounds like chaos with some jobs over running, some ahead of schedule and some customers cancelling altogether - so not sure when they’ll be starting now, was supposed to be 23rd.

As pp said though, I’m probably lucky to be able to get the work done at all, had a hard time even getting quotes for it last year!

Even the most honest builder at the moment is struggling to keep up. Your immediate assumption that every builder is an unscrupulous con artist is so far from the truth it’s laughable.

How many quotes did you have originally? I’d always get 3 for a big job. I’ve just had my 3rd kitchen quote and am so sick of kitchens from all the planning but I’m glad we got the 3rd quote as I think they’re actually the best option.

But, as we've seen here, if they're all subject to change anyway - whether for legitimate reasons beyond their control or a desire to rip you off - you can still end up no better off.

Staying with the house buying/selling analogy mentioned above, some people will deliberately make you the highest offer so as to make you choose them as your preferred buyer, only to later tell you that they can only pay a much reduced price - whether because of outside/genuinely changed circumstances or they were lying to you from the start to get their foot in the door.

Skyrocketing costs of materials make things impossible to predict and plan for both builder and customer. People like an all-in price, and builders are in a much better position of knowledge to give quotes including likely costs of materials, but sudden steep increases catch them on the hop just as much as the customer.

Maybe we realistically need to go ahead with a quote for the labour but some kind of central provisional agreement for the materials element - a bit like with tracker mortgages - for which the builder is only really an agent (unless they routinely whack on a massive profit mark-up on those as well, over and above their costs for obtaining/collecting/transporting/handling).

Our (100% trusted) garage that we've used for over 20 years give honest quotes breaking down the cost of the materials and their labour. If looking to compare, it's much more honest and transparent when you can see whether it's a fiddly. cheap but crucial little thing that they have to strip down the whole engine to fit or a very expensive model-specific electronic part that they just have to pretty much screw in.