The short answer
Keep 10 to 15% of the total budget aside, on top of the agreed price and the fees. Aim for the higher end if the house is old, the ground is unknown or you are likely to change your mind. A modular build fixes the cost of the room early, but the ground, the drains and the join with the house still carry risk.
A contingency is money you plan to spend on things you cannot yet name. On an extension, something almost always turns up. The question is how much to keep back, and how to stop it being spent on things that were never unexpected.
The usual allowance
Most budgets for home extensions keep 10 to 15% of the total as a contingency. On a £70,000 project that is £7,000 to £10,500, held separately and not counted as spending money.
Lean towards 15% when:
- the house is old, or nobody knows what is under the back garden;
- there are trees, clay soil or a shared drain near where the extension will go;
- you have not decided on the kitchen, the floor or the glazing yet.
Ten per cent is more reasonable for a simple room on a newer house with a fixed-price contract that covers the base.
What a modular build changes
The room itself is priced and made in a factory, so the largest single cost is fixed earlier than on a brick build. That is a real advantage. The risk moves to the parts that still happen at your house:
- The ground. A trial hole that finds clay or roots can turn a simple base into piles, designed by an engineer and costing several thousand pounds.
- Drains and services. A drain under the footprint, or a gas meter in the way, often costs more to move than people expect.
- The join with the house. Opening up the back wall can reveal rotten lintels, old wiring or floors at different levels.
- The crane. If the lift takes longer than a day, the second day is extra.
What a contingency is not for
It is not for upgrades. Choosing a better worktop halfway through is a change of plan, not a surprise. If you want room for upgrades, budget for them as a separate line. Otherwise the contingency is gone before the real surprise arrives.
How to protect it
- Get a ground investigation, or at least trial holes, before you sign.
- Ask the maker in writing what the base price assumes about the ground and the drains.
- Decide every finish before production starts.
- Keep the contingency in a separate account, so spending it is a decision rather than a drift.
To see what 10 to 15% looks like at your size, the modular extension cost calculator adds it as a line.