29 April 2015
Regulations add up to €60k to house cost | Karl Deeter
In a Sunday Business Post article “Building your own home will cost you- and how!” from 19th April 2015, Karl Deeter confirms extensive regulatory costs introduced since the current government came into office in 2012:
“Unaffordable housing has been made even more financially prohibitive in the last three years, due to the introduction of several new regulations, which were ill considered when it came to understanding their collective consequences…Add these things up, and you’ll see that it’s about €38,00, or more like €60,000 for a former self-builder. That’s a scandalous rip-off when viewed cumulatively and evidence of the worst outcomes of good intentions.“
Full article here: SBP K Deeter 190415
Karl Deeter will be speaking at the National Residential Property Conference tomorrow (link here)
As costs and builder’s margins increase so to have the costs introduced by the current Government on all types of construction. The cost of compliance, and thus building, has increased significantly since 2012. This has occurred without providing independent inspections, significantly improved building standards or better consumer protection. The following is a table of figures quoted in the article (we assume a typical 3-4 bed house costs €180k):
Additional Costs and Fees for a once-off house (since 2012)
Health & Safety Regulations (since July 2012) breakdown
- €500 preliminary Health+Safety Plan
- inspections as Project Supervisor Design Process (€300 per inspection x say 5)= €1,500
- Safety File (for owner) on completion €450
Sub-total Health & Safety Regulations increased fees €2,450*
BC(A)R Statutory Certifier Fees (since March 2014)
- Statutory Assigned Certifier cost (AC cost lower range- current estimates from €6,500 – €15,000) €9,000
- Statutory Design Certifier Fee €1,500
- Ancillary Certifier costs (2 engineers @ €2,000 each)= €4,000
Sub-total BC(A)R statutory certification costs €14,500
BC(A)R additional Contractor & specification costs (traditional contract procurement- since March 2014)
- Defensive specification costs (branded, certified products to ensure compliance with regulations. 5-7% appears average estimate at this point)= €8,000
- Contractor additional insurances, administrative overhead and co-ordination (lower cost for documentation, CPR2013 etc)= €4,000
Sub-total BC(A)R additional Contractors & specification costs €12,000 (since March 2014)
BC(A)R fRsi Certification (Since March 2014)
- Separate Part L Energy certification
- less than 10 people in the country are NSAI registered to undertake this specialised work
- estimates range from €3,500- €18,000- minimum cost assumed here
Sub-total fRsi Certification €3,500
BC(A)R Acoustic testing for Part E Sound-proofing between apartments and houses (since July 2015)
- cost between €1300-1500 per room (see post here)
Sub-total Part E Acoustic Test €1,500
Irish Water Connection Charge (introduced 2014- 2015)
Sub-total Average Irish Water Connection Charge €4,000
Additional Self-Builder BC(A)R Costs (since March 2014)
- This 12-14% total additional cost for the involvement of a main contractor is reasonable and not inflated.
- For a self-builder this is in addition to professional fees.
- A main contractor has to be paid for many of the tasks that a self builder could undertake: ‘sweat equity’, including project management, co-ordination, procuring subcontractors and materials, arranging deliveries, site set-up, labour etc.
Sub-total Additional Self-builder BC(A)R Costs €21,600**.
SUMMARY TOTAL COSTS
Total Typical House regulatory costs (since 2012) = €37,950.
Total Self-build House regulatory costs (since 2012) = €59,550.
The high costs of Irish building control are unique and the system continues to be completely privatised with no independent oversight. In the UK a self-financed system of building control costs just €730 per house (see link here), a fraction of the cost of building regulations introduced here last March.
- Planning Permisison costs, development levies and contributions are not included in the above.
- Commencement Notice fee of €30. to the local authority is not included.
- Additional printing, filing and future archiving costs for the extensive paperwork associated with BC(A)R are not included.
*Health + Safety costs exclude contractor’s costs for separate PSCS inspections
**Self builders also must factor in the cost of employing a main contractor to undertake the duties they intended to do themselves. On a self-build the owner frequently co-ordinates sub-contractors such as plumbers, electricians, blocklayers, carpenters etc., liaising with engineers and/or architects etc. This is quite time consuming and is where the big saving is for self-builders. Obviously where a self-builder is a tradesman they also do other work themselves. Frequently family members help out etc. A normal cost to employ a management contractor (builder) for a residential project would be in the region of 12%. A breakdown of this cost is as follows: a main contractor will normally charge 5% on top of all sub-contractors costs for co-ordination (called attendance); preliminary costs vary from 5-10% cover insurances, scaffolding, site facilities, signage, insurance etc. This cost is for contractors profit, attendances, co-ordination costs, salaries for foreman (or his salary), preliminaries and insurances etc. A standard performance bond cost also may be required.
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