The Benefits of a Fixed-Price Contract When Building Your New Home

The Benefits of a Fixed-Price Contract When Building Your New Home

Building a new home is super exciting but facing the range of options for plans, quotes and contracts can be daunting. The certainty of a fixed-price contract gives you peace of mind. Knowing how much it will cost upfront. Let’s look at the benefits of a fixed-price contract and compare the two most common contract options.


A labour-only contract can look attractive initially but you’re reliant on the builder’s estimated time. Generally, a labour-only contract is a way to save on project management costs, as you the home owner are responsible for the management and coordination of all trades. Plus these contracts are usually open-ended, so the charges for labour and materials are on-going until the project is complete.

When you chose to build on a labour-only contract, you manage the whole process. The builder is only responsible for building, and you are responsible for:

  • making sure the work meets Building Code requirements and for any defects in construction.
  • hiring, managing and paying all the different contractors
  • buying materials
  • health and safety on the building site.

If your house takes longer than expected to build or if material costs increase in the meantime, the risk of a blowout in costs is high. The last thing you want is a nasty financial surprise!

The Benefits of a Fixed-Price Contract

A fixed-price contract, as the name suggests, is where you and your builder agree on the total cost of the building based on your plans and the site, reducing the risk of overruns. When you choose a Longview home, you have the certainty of a fixed-price upfront.

Despite the name, virtually all fixed-price contracts allow for some price flexibility to the building work during construction. This is to provide security for the builder against the risk of escalating costs and covers any work which is excluded or is subject to cost variations.

It’s important to understand what these variations are, in relation to your budget. Accordingly, the contract should be transparent and specify how any variations are to be valued and how the contract price will be adjusted if necessary.

Be Sure to Compare Apples with Apples

A contract can appear quite low on the first inspection but contain a high number of PC sums (provisional cost sum = an estimated allowance), masking the final cost of a build. This practice isn’t a true reflection of the actual budget required. Treat a high number of PC sums as a warning bell and know, cheapest is not always best.

Provisional cost sums are included in fixed-price contracts

At Longview Homes, our build cost includes all tap ware and mixers, appliances, joinery, fittings, toilets, tubs, and floor coverings. And you get to choose these things yourself. We might use a PC sum for some of these items, so you also have the flexibility to upgrade to your dream kitchen if you wish, for example.

When comparing quotes, price shouldn’t be the only factor. Also consider:

  • the builder’s level of experience and reliability
  • the fixtures and fittings used (specifications)
  • references, reputations and past projects

Check out our blog on How to Choose a Good Builder for more important tips when it comes to building your new home.

Here at Longview Homes, we offer you peace of mind and the certainty of a fixed-price contract. Know your design and budget is safe with us. Know our processes are finely tuned, so we can say with confidence that every Longview Home is built to the same exacting standard of quality.

Longview Homes has locally owned franchises around the country. We always build to a fixed-price contract — so you know how much it’ll cost before we start. It would be our pleasure to take on your building project and deliver that certainty for you.

Get in touch with our team or call 0800 100 945 to start your new build journey today.



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