Shell build: the right route for your project?
Signing up to a single contract for the supply and construction of the shell of your new home can make it easier to manage your budget and reduce stress, says Mike Hardwick
Choosing the best way to deliver your project – ie how the scheme will be organised on the ground – often comes down to your budget. If you’re lucky enough to have plenty of spending power, it can make sense to put the onus on your builder or package house supplier to complete the work on a turnkey or custom build model. This will remove some of the stress and uncertainty for you, but the level of responsibility (aka the risk) they’re taking on will increase the costs. At the other end of the scale, those working with a tight budget many be tempted to save money by self project managing the scheme; ie hiring and coordinating the individual trades (and possibly buying in materials) themselves.
Somewhere in between these points is a sweet spot that works very effectively for many self builders, whereby the experts take on the hard bits of constructing the foundations, facilitating essential services and building the superstructure correctly to wind and watertight stage. This leaves you to simply manage the follow-on trades up to completion. This is known as shell building, and this month I’m looking at whether it could work for your project.
Building routes & risk
In all of the models, the overriding factor driving costs is risk. Under a turnkey arrangement, you get to pick the design and the builder delivers it to your specification –
so they take on the risk of the construction process and will be expected to address any problems that arise. Assuming they’ve been hired on a fixed-price contract, they’ll have factored these risks on top of their project margin, which is why it costs more (especially on complex projects). The same principle applies if you’re working with a custom build developer: you agree the price, and that’s what you should end up paying.
If you take on the project management role yourself, you’ll be looking to exploit that project margin by cutting out that element of professional assistance; so more of the risk lies with you. In other words, if it all goes wrong, you’ll have to find the resource to sort it out. In reality, the biggest threats to your scheme are likely to come to light at the early stages. Unexpected issues with groundworks and foundations, or hitches assembling the superstructure, will take skill to resolve and can have a catastrophic effect on your budget. Leaving these elements in the hands of the professionals makes sense, because they have the knowhow to rectify problems expediently and cost-effectively.
The biggest potential savings you can make from selfproject management stem from the fact you’re organising all of the follow-on elements of the build. Cutting out the middleman here can save up to around 10-20% of your build costs; possibly even more if you have the time and skills to undertake some of the work yourself.
What is shell build?
Fundamentally, it involves splitting the project delivery into two parts so you can balance the risks more effectively. A typical shell-build route might be for your main contractor to undertake the groundworks, foundations, drainage and superstructure works. The client would then manage the subsequent trades, such as electrics, plumbing, plastering, floor finishes, kitchen and bathroom fit-out, and decoration.
That said, the old construction adage that you never know the true cost until you’re out of the ground holds true, so you can’t expect your builder to accept unforeseen risks with impunity. For example, finding out at a late stage that soil conditions demand an engineered solution such as piling rather than the trench foundations that were allowed for in the original figures would be a legitimate extra cost.
Superstructure pricing, however, is much easier to predict and manage – so any reputable contractor will be able to accurately price the work above ground. It’s for this reason that package house companies, many of which use timber-based construction systems, won’t usually carry out the groundworks stages. Instead, they tend to stick to what you could call a pure shell build route, where their team is responsible for the design, supply and erection of the main structure (so you’ll need to organise the groundworks and foundations separately; albeit they may well be able to recommend suitable contractors in your area).
Bear in mind that the biggest variation in final project costs tends to come down to the quality of finishes used and your choice of second fix materials. With a shell route, your contractor or package supplier isn’t responsible for these elements – so they won’t be included in the price.
Fitting out the house
On a shell build, the main contractor or package company is doing all the heavy stuff, so you know that you’ll be left with a house that, on the outside at least, looks pretty much complete. The roof and guttering will typically be in place,
as will the windows – plus you’ll have a front door you can lock to keep materials and tools secure inside.
Open that door and you’ll see only bare blockwork or a vapour barrier on the walls, while the floors will consist simply of screed or decking – which might be a little daunting for beginners. What this gives you, though, is a blank canvas for the follow-on trades to do their work.
On a typical renovation project your plumbers, joiners and electricians will have to cut and knock through old floors, walls and ceilings and prop up what’s left before they can fit the new stuff into the old shell. Those modern items probably won’t be the same size or have the same fittings, either, and your workers will need to make good the finish afterwards. So there are several processes to go through.
Under the shell build model, your trades have a free hand to run wiring and pipes where they will fit best, and the whole thing gets covered up with nice fresh plaster and paint at the end – so they only have to do things once. Unsurprisingly, contractors love it because jobs like this are relatively simple to plan and manage.
What to consider
Because you’re splitting the project up, it’s vital that the scope of work you’re expecting from each party under their contract is crystal clear and understood. This is particularly important with things like incoming services (gas, electricity, water etc). The shell builder needs to know where these should enter the house and where pipework and connections will run internally, so that the necessary service ducts and fixing points can be installed to avoid any potential clashes further down the line.
Ideally, there should be an opportunity for the follow-on trades to meet with the main contractor and each other to discuss their requirements. The last thing you want is the electrician fitting the consumer unit where the cooker hood extractor vent is supposed to go!
Is it worth it?
To my mind, the shell route is a fantastic way to self-build, especially for first-timers. This option provides control and balance to your scheme because you can take on exactly as much or as little of the project management as you feel comfortable with (perhaps even some DIY), and you can integrate your own preferred tradesmen if you wish to.
There’s no hard-and-fast definition of what is or isn’t included under a shell build, so taut contracting and extensive pre-planning is essential to ensure nothing is missed. But as long as the scope of works is agreed with the builder, you’ll have the chance to make considerable savings on the overall project cost while still retaining core quality in the construction process.
There are some other benefits to having the main construction phase undertaken by an established contractor or package house supplier. For instance, if you’re a novice self builder looking to undertake all or most of the work yourself, this could spook traditional lenders and structural warranty providers. Understandably, they may worry about your hitherto untested competency to oversee the job correctly – and what might happen to their investment or liability if you get it wrong. By hiring a professional to undertake the construction of the shell, however, these risks will be dramatically reduced, thus increasing your options for funding and insurance cover.
You will also find your stress levels are reduced to a manageable level, making the shell build route a great way of turning a complex project into a much more enjoyable experience. If it all goes well, the things you’ll learn on this kind of scheme mean you’ll be better prepared to take on the full project manager role on your next scheme, because you’ll have a much better understanding of what needs to be done, when and by whom.