Cash on the Ledger, Work on the Ground: A Payment Structure for Three Counties Builds
Most homeowners negotiate hard on the headline price and then accept whatever payment schedule is placed in front of them. That is an inversion of priorities. On a Three Counties extension or renovation, the contract sum tells you what the work should cost; the payment schedule tells you how much money is at risk at any given moment. A competitive quote paired with a 30 per cent upfront demand is a less secure arrangement than a modestly higher quote released against verified milestones.
Why the schedule deserves as much scrutiny as the price
A payment schedule is a risk-allocation document. It decides who funds the build at each stage: the homeowner, through cash paid in advance, or the builder, through labour and materials committed before payment. The further payments run ahead of work, the more the homeowner is lending to the project. If the company stops trading, that advance is difficult to recover and rarely insured.
The practical test is simple. At any point in the build, could an independent person see what has been paid for? If the answer is no, the schedule is too generous to the contractor.
Four tests for every stage
A stage should be measurable, inspectable, capable of independent valuation and subject to written sign-off. "First fix complete" is weaker than "first fix electrical and plumbing complete, with pressure test and cable routes photographed prior to plasterboard". "Roof on" is acceptable only when roof covering, flashings and rainwater goods are actually in place.
Where possible, align payment stages with Building Control inspection points: foundations, damp-proof course, structural openings and steelwork, and completion. Those inspections create an independent record that work has reached a defined point. They do not replace your own sign-off, but they make disputes harder to sustain.
Sizing the deposit
A deposit is not a down payment on the whole contract. It should cover mobilisation: site set-up, scaffolding, welfare facilities, insurance, programme administration and initial material orders. Across the Three Counties, a deposit in the region of 5 to 10 per cent is defensible on a domestic project. Requests for 25 or 30 per cent upfront should prompt questions, not acceptance.
Bespoke items need separate treatment. Kitchens, glazing, oak frames and specialist render systems may require a materials deposit before manufacture. Pay these against a supplier invoice in your name, with a receipt and written confirmation that title passes to you. Keep the sum proportionate and do not allow it to be rolled into a general "materials" demand.
A worked framework for a £120,000 extension
Percentages are indicative; the contract should state both the percentage and the fixed sum for each stage.
| Stage | Share | Amount | Verified milestone |
|---|---|---|---|
| Deposit and mobilisation | 5% | £6,000 | Signed contract, insurances, programme, scaffold order |
| Groundworks and foundations | 12% | £14,400 | Excavation, foundations poured, Building Control inspection recorded |
| Superstructure and steel | 20% | £24,000 | Walls to plate, structural steel installed, roof structure complete |
| Roof cover and weathertight | 12% | £14,400 | Roof covering, flashings, rainwater goods, temporary weatherproofing |
| First fix | 15% | £18,000 | Services runs, openings formed, lintels, photographs before closure |
| Plaster and second fix | 15% | £18,000 | Plaster dry, sanitaryware and electrics installed |
| Final fittings | 10% | £12,000 | Kitchen or bathroom installation, decoration, commissioning |
| Completion and handover | 6% | £7,200 | Certificates, operating instructions, snagging list agreed |
| Retention | 5% | £6,000 | Held for three to six months after practical completion |
The figures add to 100 per cent. The point is not to copy them but to insist that each release corresponds to something that can be seen, measured and signed off.
Retention and the final release
Retention gives you leverage after the site has been swept. Five per cent held for three to six months is common on domestic work; some contracts split it, releasing half at practical completion and half after a defined period. Do not release retention before you hold the Building Regulations completion certificate, electrical and gas certificates, warranty documentation and any commissioning records. A builder who objects to a modest, time-limited retention is telling you something useful.
Written sign-off, not verbal reassurance
Use a one-page stage certificate. It should record the stage, the date, the invoice reference, the evidence seen and both signatures. Photographs should be dated and stored with the contract. Payment should follow sign-off within an agreed period, typically five working days. An invoice that arrives before the milestone is not a payment trigger; it is a conversation.
Protecting cash if work stalls
Pay in arrears wherever possible, and never pay for the next stage before the current one is complete. On larger projects, a project monitor or a contract with third-party certification can provide an independent check. Solicitor-held escrow is uncommon on domestic work but worth considering where sums are substantial. Keep a separate contingency of at least 10 per cent, and do not let it be absorbed into stage payments.
Invoice requests that signal trouble
Certain patterns recur before a site goes quiet. A demand for a large upfront materials payment beyond the agreed deposit is the most familiar. Others include invoices that arrive before the stage is reached, percentages that no longer match the contract, requests to pay suppliers directly without credit arrangements, and sudden acceleration of invoices towards the end of a stage. A change of bank details by email should always be verified by telephone using a number you already hold. Cash requests and offers of a discount for cash should be declined.
Keeping the schedule alive
Variations will happen. They should be priced and agreed in writing before the work is carried out, with the payment schedule revised and re-signed. Keep a simple ledger showing each stage, invoice, payment and sign-off. If the builder becomes insolvent, that ledger is the basis for paying only for verified work and for resisting claims to future stages. The payment schedule is not paperwork to be filed after the price is agreed. It is the mechanism that keeps money and work in step.
