How to Read a Building Estimate

Back to Knowledge Hub

Introduction

Receiving a building estimate for the first time can be an overwhelming experience. Whether you are a homeowner planning an extension, a developer reviewing tenders, or a builder preparing a bid, the document in front of you is packed with numbers, descriptions and terminology that can be difficult to interpret without the right context. Understanding what each section means is essential if you want to make confident, informed decisions about your project.

A well-prepared estimate is far more than just a single figure at the bottom of a page. It is a structured breakdown of every cost element involved in a construction project, from the materials and labour required for each trade to the overheads and allowances that keep the project running smoothly. When you can read an estimate properly, you can identify where the money is going, spot potential issues before they become expensive problems, and compare quotes from different contractors on a genuinely like-for-like basis.

This guide will walk you through the key sections you are likely to find in a professional building estimate. We will explain what each part covers, why it matters, and what to look out for when reviewing the figures. By the end, you should feel much more confident picking up an estimate and understanding exactly what you are being quoted for.

Whether you have already received an estimate and want to make sense of it, or you are about to request one and want to know what to expect, this article will give you the grounding you need. Let us start by looking at the typical structure of an estimate and the key sections it contains.

Key Sections of an Estimate

A professional building estimate follows a logical structure that breaks the total project cost into clearly defined sections. While the exact layout can vary between estimators, the core elements tend to be consistent. Understanding this structure will help you navigate any estimate you receive and quickly find the information that matters most to you.

The first page you will typically encounter is the summary page. This provides a high-level overview of the entire estimate, listing each major section with its subtotal and arriving at the overall project cost at the bottom. Think of it as a table of contents for the finances of your build. It allows you to see at a glance how the total figure is composed and which areas represent the largest share of spending.

Beneath the summary, the estimate will break down into detailed sections. The measured works form the bulk of the document and cover every trade involved in the build. These are the priced items that have been measured and calculated from the drawings, such as foundations, brickwork, roofing, plastering, plumbing, electrics and decoration. Each item typically includes a description, a quantity, a unit of measurement, a rate and a total cost.

Alongside the measured works, you will find sections for preliminaries, provisional sums and contingencies. Preliminaries cover the general costs of running the site, provisional sums account for items that cannot be accurately priced at the time of estimating, and contingencies provide a financial buffer for the unexpected. We will explore each of these in detail in the following sections.

Understanding Preliminaries

Preliminaries are one of the most commonly misunderstood sections of a building estimate, yet they are absolutely critical to the success of a construction project. In simple terms, preliminaries cover the general costs of setting up and running a building site that are not directly tied to a specific trade or measured item. They are the costs of making the project possible, rather than the costs of the physical building work itself.

Typical items included in preliminaries are site setup and clearance, temporary welfare facilities such as portable toilets and drying rooms, scaffolding hire, skip and waste removal, site insurance, temporary power and water supplies, and site management costs. On larger projects you may also see allowances for site security, hoarding, temporary roads and health and safety provisions. These are all real costs that need to be accounted for, and omitting them from an estimate is a common source of budget overruns.

The scope and cost of preliminaries will vary significantly depending on the size and complexity of the project. A straightforward loft conversion might have relatively modest preliminaries, while a large new-build development could have substantial costs for site establishment, compound setup, traffic management and project management overheads. It is important to review this section carefully and make sure it reflects the reality of what your project will require.

When comparing estimates from different contractors, pay close attention to how preliminaries are handled. Some contractors include preliminary items within their trade rates rather than listing them separately, which can make their headline figure appear lower but makes it harder to understand where the money is actually going. A transparent estimate will always break preliminaries out as a separate, clearly itemised section.

Labour vs Material Breakdown

One of the most valuable aspects of a detailed building estimate is the separation of labour and material costs. This breakdown gives you a clear picture of where the money is being spent and provides a solid foundation for managing costs throughout the life of the project. Without it, you are left guessing how much of each line item is down to the physical materials and how much is the cost of the person installing them.

Labour rates in a building estimate are typically presented in one of two ways. Day rates express the cost of a tradesperson per day on site, while measured rates express the labour cost per unit of work completed, such as per square metre of plastering or per linear metre of pipework. Measured rates are generally preferred in professional estimates because they tie the cost directly to the quantity of work, making it easier to track and verify.

The material element of each line item reflects the cost of the physical products required, from bricks and cement to timber, insulation, tiles and fixings. Material costs are typically based on current supplier pricing and should include an allowance for waste, which varies by trade. For brickwork, a waste allowance of around 5% is standard, whereas for timber cutting work it can be higher. If you notice that material costs seem unusually low, it may be worth checking whether waste has been properly accounted for.

Understanding the labour and material split is particularly useful when managing changes during a project. If you decide to upgrade a material specification, for example choosing a more expensive tile, you can see the impact on the material cost without the labour figure changing significantly. Similarly, if programme delays push labour costs up, you can identify the financial impact without it being hidden within a combined rate. This transparency is one of the hallmarks of a professional estimate and a key reason to invest in one from the outset.

Provisional Sums & Contingencies

Provisional sums and contingencies are two of the most important safeguards in any building estimate, and understanding the difference between them will help you manage your budget more effectively. They both deal with uncertainty, but they do so in different ways and for different reasons.

A provisional sum is an allowance included in the estimate for work or materials that cannot be accurately priced at the time the estimate is prepared. This is not because the estimator has been careless, but because the full scope of the work is genuinely unknown. A classic example is groundwork. Until excavation begins, the exact ground conditions, the presence of rock, clay, water or contamination, cannot be confirmed. Other common provisional sums include allowances for utility connections, drainage runs where routes are not yet finalised, and specialist finishes where the client has not yet made a selection.

A contingency, on the other hand, is a general financial buffer built into the estimate to cover the genuinely unexpected. No matter how thoroughly a project is planned and estimated, there will almost always be something that was not foreseen: a hidden structural defect, an unforeseen service diversion, or a regulatory requirement that emerges during the build. The contingency exists to absorb these costs without blowing the overall budget.

When reviewing an estimate, check that provisional sums are clearly identified and described. You should understand what each one covers and, ideally, have an indication of when it will be confirmed and replaced with a fixed cost. For the contingency, make sure it is a realistic figure for the type of project you are undertaking. A new build on a cleared, surveyed site might warrant a lower contingency than a period property renovation where the full extent of work behind walls and under floors is unknown.

Comparing Multiple Estimates

If you are requesting estimates from multiple contractors or estimating services, comparing them properly is essential. The temptation is always to look at the bottom-line figure and choose the cheapest option, but this approach regularly leads to problems. Two estimates can arrive at very different totals and yet both be perfectly reasonable, simply because they have included or excluded different items, made different assumptions, or specified different materials.

The first thing to check when comparing estimates is scope coverage. Does each estimate cover the same work? One contractor might include external drainage in their price while another has excluded it entirely. One might have priced for a specific brand of window while another has used a generic allowance. If the scope is different, the prices are not comparable, and choosing the lower figure could leave you with significant additional costs later.

Next, look carefully at the exclusions. Every estimate should have a clear list of what is not included. Common exclusions include VAT, professional fees, planning and building control fees, utility connections, landscaping and decoration. If one estimate excludes items that another has included, you need to account for those differences before you can make a fair comparison. Add the excluded items back in as an allowance to create a true like-for-like comparison.

• Check the specification: Are the same materials and quality standards being priced across all estimates?
• Review the preliminaries: Are they itemised or hidden within trade rates? A lower prelim figure might just mean costs are buried elsewhere.
• Compare contingencies: Has one estimate included a generous contingency while another has left it out entirely?
• Look at provisional sums: Are the same unknowns covered, and are the allowances realistic?
• Consider the programme: A longer build programme means higher preliminary costs, so check whether timescales are comparable.

A professional estimate from a qualified Quantity Surveyor will make these comparisons far easier because the format, structure and level of detail will be consistent and transparent. If you are struggling to compare quotes that have been prepared in different formats and with different levels of detail, it may be worth commissioning an independent estimate to use as a benchmark.

What to Do Next

Now that you understand the key sections of a building estimate and what to look for when reviewing one, you are in a much stronger position to make informed decisions about your project. The estimate is not just a price tag; it is a planning tool, a negotiation document, and a cost management framework that will serve you throughout the entire build.

If you have received an estimate and something does not make sense, do not hesitate to ask questions. A good estimator will be happy to explain their reasoning and walk you through any figures you are unsure about. If items are missing, assumptions seem wrong, or the structure makes it difficult to understand the costs, raise these points early. It is far easier and cheaper to resolve queries at the estimating stage than to deal with the consequences during construction.

If you have not yet obtained a professional estimate, we would encourage you to invest in one before committing to a contractor or finalising your budget. A detailed, independent estimate gives you a clear benchmark against which to assess contractor quotes, helps you identify potential cost savings, and gives you confidence that your budget is realistic for the scope of work you are planning.

To find out more about how our estimating process works and what you can expect when you send us your plans, visit our How It Works page. If you are ready to get started or simply want to discuss your project with one of our qualified Quantity Surveyors, get in touch with us today. We are here to help you understand your project costs and make confident decisions from the very beginning.