Budget Constraints Flashcards
Cost planning
All construction projects have constraints, mainly cost, time and scope
Cost- All projects will have a budget and the client wants value for money. It is important that a proper cost plan is prepared and that the cost are managed throughout a project
Time- The client will have a deadline by when they want the project completed
Scope- If the brief is not well defined, or changes, this can increase the cost and time for a project
Available funds and other sources of additional funding
Available funds are the amount of money an investor can spend on a project. This may not be sufficient to finance a project and so the investor or client must seek other sources of funding to finance the project, such as grants, eg for the maintensnce or repair of historic buildings
Government incentives might available, for example for first-time buyers of homes and shared-ownership schemes, or for incorporating renewables energies into the building, such as solar panels
European funding has been provided in accordance with strict rules and guidelines to ensure the money is spent correctly and in compliance with the requirements of the funding programme used. EU funding is complex, with many different programmes available and a significant amount of paperwork associated with the monitoring of the spending
Local land prices
Land values vary due to demand for land in different regions. The location of the property will have a major impact, such as whether it has a sea view, is in the centre of a town, close to a park or near local schools. If there is limited space for building and high demand for accommodation, land prices are at a premium, such as in central London
First time buyer residential accommodation
Residential development are commercial enterprise - the developer intends to make a profit fro the sales. Encouraging people to buy their first home is key as, once they are on the property ladder, it is easier to buy and sell houses in the future
However, first-time buyers are not usually particularly wealthy and may need support to be able to support a mortgage. The government offers several incentive schemes to improve first-time buyers’ potential, such as shared-ownership schemes (where the buyer buys a percentage of the house and pays rent on the rest until they can afford to buy more) and help to buys ISAs (where the government contributes an additional 25% savings in a special account). It also gives the developers financial incentives (such as grants, loans and tax relief) to encourage first-time buyers to buy on new housing estates
Life-cycle costs
Life-cycle costs are the costs of the entire project, including design, construction, maintenance, operation and demolition of the building. They should enable the client to understand the financial investment that will be required and help decide if the project is worth undertaking. Almost three-quarters of the total costs are the maintenance and operation costs. For example, the whole life costs of a shopping mall need to considered against the projected incomes to determine if is a financially viable project
