The cost of managing defects has become a significant issue for developers. While the developer can expect the contractor to meet their share of the cost, this doesn’t always happen. Most importantly the developer’s own costs to manage homeowners represent two thirds of the overall expense. This is largely attributable to the following factors:
Although the developer is responsible for 70% of the costs, they can and do absorb some of the labour and material costs. This can happen
These costs have been calculated using After Build’s Case Study exercises. The larger the developer’s business, the lower the plot cost should be. As an average across the industry, managing defects is £574 per plot pa (£97M).
Labour, based on industry rates and statistics represents 17% of overall costs. An average of £140 per plot pa (£24M), and materials a further £108 per plot pa (£18M).
Overall, the cost per plot pa is £822 (139M).
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