A word on value

One of the most obvious questions you might ask, or at least one I get asked often, is 'how much does it cost to commission an architect?'. It's also the wrong question.

If you ask three different architects to provide you with a fee proposal, you'll probably get three very different responses, and you still wouldn't be any the wiser as to how much you should be paying. It used to be that the RIBA published fee scales that dictated the minimum fees architects could charge for certain types of work. The fee scales were based on a percentage of the construction cost, because there is a logical connection between the amount of work the architect needs to do, and the size, and therefore the cost, of the building work. So, whilst fee scales didn't exactly encourage competition, at least as a client you had something to go by. Without minimum fee scales, you really need to ask a different question.

The things that affect how much an architect might charge ultimately boil down to:

  • The scale of the project

  • The complexity of the project

If you like, you can further distill this down to 'how many hours of work it will take to complete a project'. And here lies the problem you face in trying to work out which price is ‘right’. Let's carry on with our scenario of asking for fee proposals from three architects and you'll see why.

Our first architect might look at your project and decide it will take them 300 hours to complete it. They have allowed enough time to really thoroughly appraise the design options, perhaps give you a couple of different options, and then provide you with a full service, including helping you select a builder, checking their work on site and administering the terms of your contract with them. Let’s also say they have a lot of really nice projects in their portfolio, but nothing that is quite to your tastes.

The second architect might have completed a project like yours before. You look at it on their website and you love it. They tell you that they'll be able to re-use a lot of the information from the previous design, so they won't need to spend as long. Perhaps they estimate they'll save 75 hours of work, so for them it will take 225 hours.

The third architect might decide that the pre-construction services will take 240 hours, and the construction-phase services will take 160 hours. So, thats a total of 400 hours. They have won awards for their work and have a reputation for delivering outstanding design.

So now our three architects have decided how long it will take them, they can work out what their costs will be.

Without boring you with too many details, in any given year, the architect will have a certain amount of billable hours they can work and the money earned during those billable hours needs to cover all of the business expenses. So if the architect's operating costs are £85,000 per year and they are able to spend 1000 hours per year undertaking fee-earning work, then it follows that each billable hour costs the architect £85. On top of this, the architect needs to add their profit. Let's say the architect is targeting a 15% profit margin. Their normal billing rate is therefore going to be £100 per hour.

Let's say architect 1 charges £90 per hour, architect 2 charges £110, and architect 3 charges £100. Now we know this, we can figure out what the architects are likely to charge, by simple multiplication:

  • Architect 1 - £27,000

  • Architect 2 - £24,750

  • Architect 3 - £40,000

But that’s not the end of it. Now our architects need to present you with their fee proposal, and there are a number of ways they can choose to define their fee. 

Lets say architect 1 is going to offer a lump sum of £27,000. That's straight-forward enough. Architect 2 prefers to work on a percentage basis. They estimate the construction cost is going to be £250,000, so they set their fee at 10%. The final architect gives you two fee options. Option 1 is 10% too (but they have estimated the construction cost at closer to £400,000), and option 2 is a lump sum of £24,000 for a 'plans-only' service. Let's, summarise our four options below:

  • Option 1 - £27,000

  • Option 2 - 10% (architect 2)

  • Option 3 - 10% (architect 3)

  • Option 4 - £24,000 (plans only)

How do you choose which one to appoint? Well, honestly, there isn't only one right answer. All of them are genuine attempts by the architects to interpret your requirements and offer a competitive fee for their service. This is why you need to re-define the opening question. What you really need to be asking, is 'who is offering the best value?' And the answer to that is, I’m afraid 'it depends'.

You might think option 1 is good value for money if cost-certainty is a priority and you need a full service. However, you will have to weigh that up with the fact that the architect's portfolio was good, but not quite the right fit. Do you trust them to come up with a design that is exactly what you're looking for, or do you think they'll stick to what they know? 

On the other hand you might say option 2 is really good value because you've looked at the other project the architect did, and you really like it. You have no objection to them adjusting the previous design to suit your requirements as it means you get a really good design for a bit less money.

Or, perhaps you really want a prestige, potentially award-winning project. In which case you'd probably value one of the options given by our third architect.

So whilst I cannot tell you which is the 'right' price - they are all right, but they're all offering different things - what I can do is give you a few bits of advice to bear in mind that will hopefully make the decision a bit clearer:

  • A cheap job isn't necessarily good value. Don't automatically go for the cheapest option until you know exactly what you're getting for your money. Even if your budget is tight (see below).

  • Only work with the architect you completely trust and feel comfortable working with, even if that is the most expensive option. I cannot stress the importance of this enough. Remember, you might be working with them for the next couple of years or more. If you don't click, that's going to be very challenging for both of you. The last thing you need is to be feeling like your constantly resisting your architect’s ideas and advice.

  • Find out exactly what is included and what is not included. How frequently will they visit the site during the construction period? What happens if planning permission is refused the first time round? Will you have face-to-face meetings to review the design, and how many? Will they design the kitchen and bathrooms? Ask questions and if the answers are vague, you might want to think twice. Alternatively, if you have some experience already, set out your requirements from the outset.

Lastly, I'd really urge you to consider architect's fees in the context of the lifetime of the project. For example, if you're building a dream home that costs £370,000 to construct and you live in it for forty years, over the course of that time you might spend another £250,000 using and maintaining it. If an architect can save you £100,000 in the lifetime costs (which by the way is entirely plausible) then all of a sudden spending that additional £10,000 starts to look like money well spent. Another way to look at it is, if spending that extra £10,000 means you get a project that brings a smile to your face every day for forty years, then you have paid 68.5p per smile. That seems like fantastic value for money to me.