I remember early in my consultancy career, the practice I was working for was asked to advise a ‘client’ about a large mixed residential scheme that he was promoting in East London. He had persuaded a reputable architect to prepare a masterplan and had approached a High Street Bank for funding, which is where we came in.

The Bank, understandably, wanted to know whether the scheme that the ‘client’ was proposing was viable. The ‘client’ was initially reluctant to share his appraisal but eventually we were sent a copy and I asked our residential QS team to provide a range of costs for the different types of units shown on the master plan.

And that was where the alarm bells started to ring. You see, the ‘client’ had applied one rate to everything from key worker homes to high-end residential. When asked where he had got this ‘blended’ rate he explained that he had spoken to a well-known contractor who had provided him with the rate, but no explanation of what the rate applied to or whether the contractor had been provided with a copy of the masterplan (there’s a lesson here too).

To cut a long story short, we plugged the different rates into the appraisal and, unsurprisingly, it didn’t stack up. The ‘client’s’ response, ‘You QS’s always over-price’.

The reason I tell this story is to illustrate a point. I am not a Doctor and no matter how many episodes of Holby City I watch, I will never be one. If I want medical advice, I ask a medical professional. But some clients and property agents will happily quote build costs without understanding what it costs to build or considering the effect that location, site conditions and building form can have on that cost.

I wrote another blog where I talked about the need to consider a range of site factors when preparing an appraisal. Factors such as ground conditions, flood risk, rights of light and the availability and capacity of services, can all have a significant effect on the build cost.

But the height and shape of a building must also be considered. There are many models to illustrate this point but it underlines the reason why an understanding of cost modelling is so important.

My advice? Ask a QS. That doesn’t mean accepting everything at face value. Get them to explain their assumptions and why something costs more or less than you think it should. There is plenty of cost data out there against which to benchmark your scheme, but it shouldn’t be relied on for something as important, and sensitive, as a development appraisal.

And what happened to the ‘client’ with the scheme in East London. I never heard from him again and as far as I know the scheme was never realised. I have no doubt in my mind however that he would have continued doing the rounds until he found someone who was prepared to tell him what he wanted to hear. And therein lies another problem…but that’s for another blog.

Paul Nash MSc PPCIOB

Related Blog Posts

Ensuring planning reform delivers the right quality and quantity of homes


Construction Consultant, Paul Nash, recently joined Housing Minister, Christopher Pincher MP, and a panel of experts from the built environment professional bodies, to discuss planning reform and its role in delivering the right quality and quantity of housing.

In this article, he shares some of his thoughts on this important issue.

RICS: Time for change?


In this article, RICS Members at Jansons Property share their views on the findings of the report and what changes they would like to see at the Institute.

Business Matters features Andy Jansons


Andy Jansons, Founder and Managing Director of Jansons, Property reveals his tips for building a success story in the development sector and explains the importance of sticking to the company’s core values, no matter what challenges you have to face.

Building Safety Bill enters Committee Stage – Why building owners and investors should take note


Today [7th September 2021], the public inquiry into the circumstances leading up to and surrounding the fire at Grenfell Tower resumes. It marks the next stage in a process that is looking to learn the lessons of the Grenfell Tower fire to ensure that it never happens again.

The Biggest Changes to Fire Safety Legislation in a Generation… Are You Prepared?


With so much government and media attention focused on the response to the Covid-19 pandemic, you would be forgiven for missing an important piece of legislation that has been quietly progressing through Parliament with very little fanfare. The Fire Safety Bill 2020-21, which received its first reading on 19 March 2020, is expected to receive […]