Contingency

A contingency is money you set aside specifically to cover unexpected costs during your renovation. No matter how carefully you plan, surprises happen — hidden problems behind walls, material price increases, or design changes you didn’t anticipate. Your contingency is the financial buffer that absorbs these shocks without derailing your project.

How much contingency should you set aside?

The standard recommendation depends on the type of project:

• 10-15% — for newer properties or straightforward renovations where the scope is well defined
• 15-20% — for older properties, structural work, or projects with more unknowns
• 20-25% — for heritage or very old buildings where hidden issues are almost guaranteed

This percentage is calculated on top of your contractor’s quotation, not included within it.

Common reasons you’ll need contingency

• Structural surprises — removing plaster to find crumbling brickwork, opening a floor to find rotten joists
• Plumbing or electrical issues — outdated wiring or pipework that needs replacing once exposed
• Asbestos or damp — problems that aren’t visible until demolition begins
• Material price changes — if your chosen materials become unavailable and substitutes cost more
• Design changes — decisions you make during the build that alter the scope of work

Tips for managing your contingency

• Keep it separate — don’t mentally merge it with your main budget. It’s not spare money for upgrades
• Track usage — log every time you dip into contingency, with a description and cost
• Approve changes formally — if the contractor needs contingency funds, agree via a change order before the work is done
• Don’t spend it all — if you reach the end of the project with contingency remaining, that’s a win

The single biggest budgeting mistake renovators make is not having a contingency at all. The second biggest is spending it on upgrades instead of keeping it for genuine surprises.