How are Architects Fees Calculated

In the UK, Architects fees are typically charged in one of three main ways:

• Percentage of Construction Cost

• Lump Sum

• Time Charge / Hourly Rate

Percentage Fee: a percentage fee gives the client a reasonable indication of total Architectural fees, whilst also allowing for some flexibility if the project scope is increased. Percentages are based on the construction cost (excluding VAT and professional fees), as this is generally proportionate to the work required by the Architect.

The fee will be automatically adjusted to any changes in the estimated construction cost. This estimate is refined during the design process, providing a straightforward way of adjusting fees to changes in the project size or complexity, without having to renegotiate.

Different rates apply to different projects but as an approximate guide Architects fees tend to lie between 10% and 15% of the building cost depending upon the type, size and complexity of the project.

Lump Sum Fee: In instances where either a partial service is required or the scope of the project is fully understood an Architect is able to offer a fixed sum fee proposal.  This type of fee will be very carefully defined based on specific items of work. If additional work is required or the nature of the appointment changes the fixed fee will be renegotiated. This approach may, therefore, be best for a straightforward project with a very clearly defined brief.

Time Charge Fee: Time charged fees work well at the start of a project when the scope hasn’t been clearly defined. They can also provide flexibility with a ‘pay as you go’ approach when used for the entire process. This option offers the least fee certainty for the client, so often an Architect will estimate the total number of hours required, or agree hourly caps.

Other points to consider

• For larger projects with higher build costs, the percentage upon which the fee is based will be lower. This is due to the economies of scale in larger projects.

• In the UK, VAT is chargeable in addition to Architects fees.

• Additional sums are usually payable for expenses incurred in connection with the work (printing, postage, travel etc.).

• Any disbursements made on a client’s behalf are usually charged at net cost. This includes things like payments to the Local Authority for planning applications.