Builders deposit - what is common?

[MoHunter]

We are currently getting quotes for structural/building work (taking down a load bearing wall, putting in steel, adding wall, ripping out old kitchen/flooring etc). Not a small job.
The work would not be starting until Jan/Feb 24.
Is it common for a builder to ask for a deposit in advance and if so how much/what percentage of the overall costs?

To elaborate: The costs quoted so far are mainly labour plus steel beam, supports, stud wall, some plumbing materials etc. We haven't decided on kitchen/flooring yet so this hasn't been included in any quotes yet.
One builder in particular has asked for a deposit equal to about 28% of his quoted price in advance, I think this is a red flag?? The builder was recommended to me but by someone I don't know very well.
His overall quote is cheaper than the others.

What is the overall cost, I would reluctant to give money to an unknown builder.

Is there a written contract involved? I am usually fine with a deposit that mostly covers materials (although I always have them delivered to my house!).

Just an email quotation outlining the work to be undertaken.

He has now replied saying he has had clients bail out etc so it's to ensure we are committed but is now happy to reduce deposit amount to 10%.

The total cost quoted currently is around £7500 but job will be bigger as additional work for fitting new units etc can't be quoted till we have the kitchen design.

I think I'm happy with the 10% just wondered if this is normal?

Depends. If is a large company that you have checked on companies house then I might. If it was some sole trader that I didn't know from Adam I wouldn't give them a penny as if they disappear you have no way of getting it back.

Oh god no, don't hand money over until the work has started.
We got conned out of £10k by giving a builder a deposit.

My husband is in construction and if a job is say 6 weeks long, he will ask for 1/3 of the total cost of the job 2 weeks in, and then after 4 weeks the other third and then on completion the final payment. He would never ask for a deposit or money upfront

It does depend. From his perspective - Steel is expensive so the deposit may be around that - if it’s custom made for the job and you back out then he can’t return the steel or sell it on easily. DH owns a building company and they don’t take deposits unless the job is a long one as they have good relationships and accounts with suppliers and can cover themselves until the end of the job. I worked for another very reputable (in this area) building firm and if the job was over a certain amount they would take 25% on signing the contract, 50% halfway through and the final 25% on completion.

When I've had larger projects it's been split 3 payments. A third upfront, a third half way, a third at the end

We didn’t pay a deposit on our last, £90,000 project. They asked for a stage payment one month in, one more about the same time later and the balance after building regs sign off.

Best builder we’ve ever used.

I was always told tradesman asking for deposits in advance of work starting is a red flag that the company has inadequate cash flow and poor liquidity. Effectively they’re using your money to fund their other building projects in flight. It will catch up eventually and it might be on your building project. Staged payments are different, for meeting contractual milestones for work complete, and are reasonable.

None. Never pay any money up front. Any legitimate builder or building company wouldn’t need a deposit. Make sure you have a contract for the works and staged payments should be in place/agreed once the work starts. Check for retention held back as well as this means you’ll be able to hold back an amount until all works/snagging complete. Usually 5%.

Wow, certainly seems to be divided opinions!
So the 10% deposit would be less than £1k, I certainly wouldn't entertain paying thousands up front... argh, why is this so difficult! I've had other builders in but I'm really struggling to make a decision.

I wouldn't pay anything upfront. They should have good enough cash flow and credit with suppliers available.

We did £180k project over five months. About £160k of that was to builder. Nothing asked for upfront. The first evaluation was sent two weeks after they started work - spreadsheet detailing costs of what had been done so far, usually a % of a total toward something eg skip hire) if not the full cost of it. We then had a week to pay. So effectively paid nothing until three weeks into project.

We got a new evaluation every 2 weeks, with a week to pay. So we only ever paid for work that had been done. Amounts did vary between the evaluations quite a bit which meant we had to be careful to have enough available in easily accessible savings to cover it (premium bonds turned out to be difficult as there's a delay if you request the money back just before a draw!).

It was very satisfying seeing all the % on the evaluation spreadsheet go up to 100% as work progressed. The last 10% we weren't asked for until work was complete to our satisfaction.

We were asked for a 10% deposit at the point of signing the contract, to cover materials and so on up front. We were happy with that, as we had a very detailed quote and payment schedule, and it was a well-established local company who I’d had my eye on for a couple of years before we were able to go ahead and build. But I’d definitely do some digging before handing over money.