If you are planning a construction project, whether it is a new build, development, or refurbishment, one of the first things you need to understand is this:
How much is it actually going to cost?
It sounds obvious, but you would be surprised how many projects progress without a clear, structured answer to that question.
This is exactly where an Order of Cost Estimate (OCE) comes in.
At Ashington Hill, this is one of the first things we advise clients to get right. It is not just a number on a page. It is the foundation for every key decision you make moving forward.
What is an Order of Cost Estimate?
An Order of Cost Estimate is an early-stage cost plan prepared in line with RICS NRM1 guidance. It is typically produced at the very beginning of a project to establish whether what you are planning is actually affordable.
In simple terms, it answers three key questions:
- Is the project financially viable?
- What is a realistic construction budget?
- Where are the risks that could impact cost?
Think of it as your financial reality check before you commit serious time and money.
Why an Order of Cost Estimate is so important
One of the most common issues we see is clients progressing too far without proper cost planning.
They might have:
- Purchased a site
- Instructed architects
- Submitted planning
Only to find out later that the build cost is far higher than expected.
At that stage, you are already committed, and changing direction becomes expensive.
A properly prepared Order of Cost Estimate in the UK construction process avoids that.
It gives you:
- Clarity from day one
- Confidence when speaking to lenders or investors
- Control over design decisions
- A clear budget to work within
What should be included in an Order of Cost Estimate?
A good OCE is not just a rough £ per square metre guess. It is a structured cost plan that builds up the full picture of your project.
Here are the key elements:
Site preparation and enabling works
This includes demolition, site clearance, and dealing with ground conditions. These costs are often underestimated but can have a major impact on your budget.
Core construction costs
This is the main build cost, including structure, finishes, and services. These figures should be based on reliable benchmarking such as BCIS data and adjusted for specification and complexity.
Preliminaries
These are the costs of running the site, including site management, welfare, and programme-related costs. On many projects, this sits around 10 to 12 percent.
Contractor overhead and profit or construction management fee
This will depend on your procurement route. Choosing the right route here can make a significant difference to overall costs.
Professional fees
Architects, engineers, project managers, and quantity surveyors all need to be factored in from the outset.
Risk and contingency
This is where experience really matters. Refurbishments, heritage buildings, and complex sites all carry risk, and this needs to be properly allowed for.
Inflation
Construction costs change over time. Ignoring inflation, especially on longer programmes, can quickly lead to budget issues.
How do quantity surveyors prepare an Order of Cost Estimate?
Under RICS NRM1, there are three main methods used for cost planning:
- Floor area method (cost per square metre)
- Functional unit method (cost per unit or dwelling)
- Elemental cost planning (more detailed and accurate)
In reality, most experienced quantity surveyors will start with benchmarking and then quickly move into a more detailed breakdown as information becomes available.
This is where the quality of the cost advice really starts to show.
Common mistakes when producing an Order of Cost Estimate
Not all cost estimates are created equal. In fact, this is where many projects go wrong.
Here are some of the biggest issues we see:
Relying on generic cost per m² figures
Every project is different. Specification, location, and complexity all matter.
No proper risk allowance
Particularly on refurbishments or listed buildings, this can be a major issue.
Ignoring procurement strategy
The choice between traditional contracting and construction management can significantly affect cost.
Lack of real market data
Without benchmarking against live projects or BCIS data, the numbers are often unreliable.
Our approach to cost planning at Ashington Hill
Our role as a RICS regulated quantity surveying and project management practice is simple:
Give you clear, realistic, and honest cost advice from the outset.
We do that by:
- Benchmarking against real market data
- Adjusting for specification, location, and complexity
- Clearly identifying risks rather than hiding them
- Aligning the cost plan with the right procurement strategy
We are not here to make the numbers look good. We are here to make sure they are right.
What an Order of Cost Estimate allows you to do
When done properly, an OCE gives you control.
It allows you to:
- Decide whether a development is viable
- Adjust your design before it becomes expensive to change
- Secure funding with confidence
- Set a realistic construction budget
- Avoid costly surprises later in the project
Final thoughts
If you are starting a construction project, investing in a proper Order of Cost Estimate is one of the smartest decisions you can make.
It is not just about cost planning. It is about protecting your investment and making informed decisions from day one.
Need help with your project?
At Ashington Hill, we specialise in cost planning, quantity surveying, and construction management for residential, heritage, and complex projects across the South.
If you are at an early stage and want to understand your project costs properly, we are always happy to have a conversation.
