Payment Schedule for a London Extension: How Much to Pay, and When

The deposit is where homeowners start to feel trapped. A large sum goes out before much exists, and every later invoice is a little harder to question. A payment schedule does the opposite. Money moves when a stage is done, not when a date arrives.

I am Ben Murrell. I set these up before a builder starts, because they are miserable to invent in week six.

What a stage payment is for

You are not funding the builder's next job, and you are not paying for work you cannot see. You are paying for a described chunk of your extension, after it exists. A JCT homeowner contract is built around that idea. A quote with "30% to start, then as works progress" is not.

There is no single legal percentage I can hand you. The schedule has to match the job. A side-return with a lot of groundwork should not have the same first payment as a loft that is mostly timber. What follows is the shape I push for on a typical South West London rear or side extension. Treat the percentages as a way to test a builder's proposal, not as a rule.

A sequence that keeps leverage

Stage	What should be true before you pay	Share of the build cost, as a test
Deposit / mobilisation	Contract signed, start date agreed, insurances seen. Materials not yet on site.	About 5%, and I would question anything much above 10% before work starts
Foundations and slab	Excavation, concrete and any drains in the ground done and inspectable	About 15–20% cumulative
Superstructure	Walls, steels and roof structure up	About 40–50% cumulative
Weathertight	Roof covered, windows or temporary weathering in, building dried in	About 60% cumulative
First fix	Plumbing, electrics and joinery carcasses in, before they are covered	About 75–80% cumulative
Second fix and finishes	Plaster, kitchen, decoration, sanitaryware	About 90–95% cumulative
Practical completion	You can use the room, building control signed off or the inspection booked, snagging list agreed	All but a retention
Retention	Released when the snagging list is closed, often after a short defects period	Often 2.5–5%

Cumulative means "paid so far", not "this certificate alone". If a builder's schedule has you at 70% by the time the roof timbers are on, you are ahead of the work. That is the number to negotiate, before you sign.

VAT sits on top of these stages if the builder is VAT-registered. Agree whether every figure is ex VAT. I have written that separately, because a 20% surprise is its own problem: VAT on a house extension.

What to check on the day you pay

The stage in the schedule matches what is on site. Photos from the builder are a start. A walk-round is better. If you cannot get there, someone on your side should.
Variations agreed in writing are either on this invoice, clearly separated, or not billed yet. They should not be folded into a stage so you cannot see them. See what an extra should cost.
Materials you have paid for that are not yet fixed are listed, and ideally stored on your site. Paying for a kitchen that is still at the supplier is a different risk.
Retention is still retained. The last invoice before completion should not quietly include it.

The pressure this removes

A Friday invoice, with the builder waiting, is when people pay to end the conversation. A schedule agreed in week zero means the conversation already happened. You are checking a list, not deciding whether you are allowed to hesitate.

That is also the money. Overpaying early does not always become a loss. It becomes a loss when the job slows, or stops, and the work left is worth less than the money left. The clients who were abroad for their build — Pierre and Lottie in Earlsfield — could not do this check themselves. The check still had to happen.

My fee is 10–12% of the ex-VAT project cost depending on how involved you want me. On the 20 m² illustration (£64,000–£84,000 build cost) the standard 11% is about £7,000–£9,200. A schedule and the checking of payments against it is part of that, not an extra. The detail is on what a project manager costs.

If you have a draft schedule in a quote and you want it read before you sign, send it.

Send a quote to review · 07525 474 849 · benmurrell83@gmail.com