Traditionally, the RIBA produced a recommended fee scale, which took the form of a graph and suggested a fee dependent upon the size and type of any given project. However, times have changed and the recommended fee scale is no longer operational. Instead, many architects now produce their own fee charts based upon practice-specific factors, such as operational costs.
The way architects charge for services is still dependent upon project size and type but typically, fees are now calculated using either of the following methods of charging, and occasionally a combination of:
percentage of construction cost
It is possible for fees to vary and the reasons for this are numerous, but it is important to understand that fees will reflect the level of service provided and, crucially, the quality of the completed building. Therefore, you should consider the cost of an architect in conjunction with the value added to your project by a practice.
Time charge fees
At the outset of a project, time charge fees can be the most appropriate way forward when a project scope is yet to be fully defined. Equally, for small projects of up to £40,000 this ‘pay as you go’ approach may be more appropriate than a percentage fee, for instance. When this approach is adopted the total number of hours required is estimated or an hourly cap is agreed. In the event of further work being added to a contract, then additional time will also be estimated and agreed prior to the commencement the additional services.
This is the most commonly adopted method of calculating fees. It is based upon a percentage of your initial construction budget and it provides a reasonable indication of the total fees for architectural services. Quite simply, the construction cost, excluding VAT and professional fees, is generally proportionate to the amount of work undertaken by the architect and therefore provides an accurate barometer for calculating fees.
As your project evolves through the design process your initial construction cost estimate is refined. Consequently, the fee automatically adjusts to changes in project size and/or complexity without the need to re-negotiate, although your architect should keep you informed of cost variations and obtain your agreement to any revised costs during the later stages of your project.
Understandably, clients can be concerned that the percentage approach doesn’t incentivise architects to develop designs aimed at low construction costs. Although this opinion is understandable, it is important to remember that architects offer a professional service and are bound by a Code of Conduct issued by the Architects Registration Board (last updated in 2017). It requires architects to be ‘honest and act with integrity’, and to ‘be trustworthy and look after your clients’ money properly’. Amongst many others, this code of conduct is a key difference separating architects from draughtsmen.
Lump sum fees
This type of fee is typically based upon a well-defined scope of work. Consequently, any changes to the nature of the architect’s appointment will require renegotiation of the fee. Therefore, this type of fee is best employed when the project brief is very clearly defined.
Other points for consideration
Should your architect be VAT registered in the UK, VAT is chargeable in addition to architects fees
RIBA architects’ fees should be no greater than non-RIBA chartered practices
Occasionally a percentage fee will only be amended to reflect changes greater than 10% in the cost estimate. Reasonable project variations are expected and accounted for.
Additional sums are usually payable for expenses incurred in connection with the work (travel, printing, etc)
Disbursements, such as payments to local authorities for planning applications, made on the clients behalf are typically charged at net cost.
For an architect there are two crucial matters to consider for all projects; the charge-out rate required to make a job profitable and the number of hours required for a project. Regardless of the adopted fee approach, the relationship between these two factors shall mean that the total architectural fee paid at the time of project completion, will be the same. Ultimately, time is what an architects charge you for and as with other professional services, time is a finite resource and the most valuable commodity.
For a full service, architectural fees are typically based upon stages 1-6 of the RIBA Plan of Work and fee proposals will be provided in conjunction with a schedule of services. The schedule will itemise included work and outline any exclusions. In the event of a client requiring additional services after appointment then give be undertaken either for a separate, agreed, fixed fee or on a time charge basis. It goes without saying, that architects must obtain client consent prior to commencing any such additional services.
Below are examples of possible, extra services, each of which would likely incur an additional percentage fee of between 0.5% and 2% dependant upon type/scope of the project:
Detailed joinery design: bespoke kitchen, bookcases, wardrobes etc.
External landscape design: surface finishes, planters, boundaries, lighting
Interior design: furniture, soft furnishings, decorations, specialist lighting
Comparative to other project types, residential projects are one of the more protracted. Homes are very personal to a client and consequently the architect's desire to deliver a high-quality building is matched by the need to provide a high-level of customer service. Often residential commissions are relatively small and bespoke, offering limited economies of scale or repeated elements.
Fees for a new-build home
Clearly, a vacant site primed for a new-build house is the most straightforward private residential project type for an architect. This is typically reflected by the lowest percentage fees for residential work. There are numerous matters to consider so the figures noted below are indicative to a point however, for a new-build house, architects fees in 2018 may be as follows:
£100k budget: 9.5%
£200k budget: 8.5%
£500k budget: 8%
£1m budget: 7.5%
VAT is not typically payable on construction costs associated with a new house however, VAT is still payable on fees for professional services undertaken by architects and other consultants involved in the project.
Fees for extensions, basements and conversions
These projects can be extremely time-intensive due to working with existing buildings, which can offer high-levels of complexity. Often these projects require a level of refurbishment to the existing house and there are few economies of scale or repetition.
For a high-quality extension, architects fees in 2018 will be in the region of:
£100k budget: 14%
£200k budget: 13%
£500k budget: 12%
£1m budget: 11.5%
Good architects add significant value to projects and that may not be obvious until your project is completed. That value could either be reflected in monetary terms with increased property value, or more simply in a client's enjoyment of the design and the value that client places upon said enjoyment.
When considered proportionately, as part of the overall project cost, architect fees are relatively small.
Construction projects can be long and all too regularly stressful, so it is important to select an architect with whom you feel comfortable.