With Charlie Saunders MRICS MCIOB, Emerson Bond
We spoke to Charlie Saunders MRICS MCIOB of Emerson Bond, one of the UK’s leading monitoring surveying practices. A trusted CrowdProperty partner, Emerson Bond provides services across many of our development projects, with examples featured in this article.
Drawing on his experience monitoring residential developments across the UK, Charlie shares his perspective on construction budgets, project viability, current market conditions and the factors that give lenders greater confidence when assessing development finance.
Whether you’re preparing your first development or your fiftieth, understanding how construction budgets are assessed can help reduce uncertainty, strengthen funding applications and avoid costly surprises later in the project.
Q: To start, what’s your view of the construction market at the moment? Are you still seeing inflation and price volatility, or is the market beginning to stabilise?
A: Not yet. Material prices are still volatile, particularly where they are influenced by oil, energy and shipping costs.
The conflicts in the Middle East are adding pressure in those areas, which can then feed through into construction materials, transport and plant.
ONS data showed that UK manufacturers’ input prices were 7.3% higher in June 2026 than a year earlier, with crude oil prices up 42.3%.
Construction materials are also moving at very different rates. In the year to May, structural steel increased by 13.1%, aggregates increased by 12.2%, and bituminous materials increased by 11.0%.
Contractors may be competing harder for work, but developers should not assume that input costs are stable.
Q: From a monitoring surveyor’s perspective, what are the first three things you look at to decide whether a construction budget is credible?
A: Detail, design and market testing.
The first thing I look for is detail. Ideally, the budget should be broken down by element or trade package. A rate per square metre or per room can be useful, but it can also hide missing items.
The second is the level of design behind the price. A contract may be described as fixed price, but if the pricing is based on concept information, we need to understand what has actually been included.
The third is how recently the costs were tested. Recent tenders and quotations give much more confidence than an older estimate that has simply been adjusted.
Q: How important are design maturity and procurement when you’re carrying out due diligence on a project?
A: They are fundamental to our assessment.
A contract can be called fixed price, but the project cost is not truly fixed if the design is still developing.
We look closely at the assumptions, exclusions, provisional sums and any design risk that remains.
That becomes even more important on self-build and construction management projects, where different suppliers may have priced different scopes. The Borrower’s QS needs to make sure the quotations have been normalised, overlaps removed and any gaps identified.
Q: What technical approvals and due diligence should be in place before a lender commits to funding?
A: There needs to be enough information in place to show that the scheme is both buildable and compliant.
Building control is a key area. If the plans check is incomplete, costs for items such as sprinklers, smoke ventilation, fire protection or acoustic upgrades can emerge later.
The right surveys also need to have been completed. Depending on the project, that may include ground and contamination reports, asbestos surveys, structural investigations, a Right to Light survey and party wall advice.
For higher-risk buildings, Building Safety Regulator approval is critical. In our experience, Gateway 2 can take more than six months, rather than the 12 weeks often assumed in early programmes.
Q: What costs and risks most commonly emerge during your project monitoring that weren’t identified at the outset?
A: Utilities are one of the biggest recurring risks.
Early budgets may include a broad allowance, but costs can increase once capacity, connection routes and any reinforcement works are confirmed. Firm quotations should therefore be obtained as early as possible.
Planning-related costs are another common gap. These can include CIL, Section 106 obligations, Section 278 works, planning condition discharge costs and, on applicable schemes, the Building Safety Levy from 1 October 2026.
Insurance can also be misunderstood. On refurbishment projects, the contractor’s policy may not cover the existing building, so the developer needs to confirm the position and allow for any additional premium.
Q: How do you assess whether construction costs are realistic and still reflect the current market?
A: We test the detail, then compare it with internal data.
We start by looking at the detail behind the budget, including when it was prepared, what information it was based on and whether it has been competitively tested.
We then benchmark them against comparable schemes monitored by Emerson Bond. This allows us to compare the overall cost and programme, as well as individual elements.
Published data is useful, but live project evidence is often more reliable and informative.
A headline rate per square metre may look reasonable, while individual packages such as the façade, structure or building services are materially underfunded.
Q: When reviewing projects, how important is contingency, and what do you typically expect to see?
A: Every project needs contingency, but the right level depends on the risk.
A well-developed new-build scheme under a properly defined fixed-price contract should need less contingency than an early-stage refurbishment with limited surveys and unresolved design.
Ideally, contingency should be supported by a quantified risk register.
As a broad guide, we often see 5% to 7.5% on largely fixed-price contracts and 7.5% to 10% or more on self-build or construction management schemes
Contingency should be there to deal with genuine uncertainty. It should not be used to cover known omissions in the budget.
Q: Looking across the projects you’ve monitored, what are the most common reasons construction budgets come under pressure?
A: Budgets usually come under pressure because the scope was not developed far enough when the budget was agreed.
Other common causes include incomplete surveys, underestimated utilities, building control changes, planning requirements, client changes and gaps between trade packages.
Delay is also a major factor. It increases preliminaries, professional fees, insurance and finance costs, even where the physical scope of the works has not changed.
Q: What can developers do before seeking funding to give lenders greater confidence in their project?
A: Make sure the information ties together.
The design, specification, budget, programme, procurement strategy and statutory approvals should all be consistent.
Developers should also appoint a QS early, obtain firm quotations for higher-risk packages and clearly identify anything that remains unresolved.
Lenders do not expect every risk to have disappeared, but they do expect it to have been understood and allowed for.
Q: Looking ahead, what trends do you think will have the biggest impact on construction risk, costs and project viability over the next 12–24 months?
A: Geopolitical risk is likely to remain a major factor.
The conflicts in the Middle East are already affecting oil, energy, commodities and shipping costs. Those pressures can then feed through into steel, bitumen, plastics, insulation, transport and plant, particularly where products are energy-intensive or imported.
BCIS reported in July 2026 that 59% of construction professionals surveyed believed the conflict was already affecting UK tender prices.
Building safety regulation and contractor financial resilience will also remain key concerns.
Developers will need to keep costs under regular review, understand quotation validity periods and avoid relying too heavily on historic market testing.
Q: Finally, what’s one piece of advice you’d give every developer before construction starts?
A: Make sure the budget reflects the project you are actually going to build.
Before construction starts, the latest design, planning requirements, building control position, utility quotations and contractor proposals should all be checked back against the budget.
It is much easier to deal with a funding gap before the project starts than after the facility has completed and construction is under way.
Key takeaways for developers
While every development is different, several themes emerge consistently throughout Charlie’s insights:
- Preparation builds confidence. Detailed information, mature designs and realistic assumptions help lenders and monitoring surveyors assess projects more efficiently.
- Construction budgets should be robust, not optimistic. Detailed cost breakdowns, current market testing and appropriate contingency are far more valuable than broad estimates.
- Early due diligence reduces risk later. Utilities, statutory approvals, planning obligations and technical surveys can all affect project viability if overlooked.
- The market remains dynamic. Material prices, geopolitical uncertainty and regulatory change continue to influence construction costs and project risk.
- Successful projects are built on realistic assumptions. Developers who identify potential risks before seeking funding are often better placed to manage them as projects progress.
Further reading and resources
Producer price inflation, UK – Office for National Statistics
Construction professionals poll: Iran impact on UK tender prices
Construction building materials commentary June 2026
About Expert Insights
Expert Insights is a series of interviews with trusted professionals from across the property industry, including surveyors, solicitors, planners, architects and other specialists who help shape successful residential developments.
Our aim is to share practical, experience-led guidance that helps SME property developers make better-informed decisions at every stage of the development journey.
Look out for future interviews as we continue exploring the topics that matter most to developers, from planning and legal due diligence to valuations, construction, sales and development finance.
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