First, we need to be clear about what it costs already, and how we arrive at that figure. There’s a formula that can be applied to any business who wishes to organise their own After Care. To provide proper After Care requires a dedicated resource of a minimum of two people.
Why? Well, dedicated because you never know when a homeowner is going to call to report a problem. So, to be available when they do, requires a dedicated, full-time resource.
And because one person will need breaks and holidays; will be sick from time-to-time; and you will experience staff turnover - you need two people.
There are further costs beyond this … a suitable CRM system, office space, mobile phones, a line manager. It is fair to say that the economics of this really don’t work for SME businesses. But come April, they will work even less!!!
If your resource is operating at the level of the National Living Wage, this rises from £11.44/hr to £12.21/hr from April this year (2025) … a 6.7% increase.
And of course, the Employer’s National Insurance contribution rises from 13.8% to 15%. Adding in the Employer’s pension contribution (3%) the overall new package will cost an employer £28,094 per employee, and that’s an annual cost of £56,189 (X2 staff). After Care requires 2 years cover (the Builder’s Rectification Period) so that becomes a wage bill of £112,378 and an increase of over £8,000!!!
What are your options?
Large developers can make the costs work because of the economies of scale. But much under 1,000 plots a year, this doesn’t work at all.
For a SME developer, outsourced After Care makes the most sense. It is affordable and you only need pay for what you need - when you need it.
PLOTS COMPLETING ANNUALLY | DEVELOPER OWN SERVICE COST PER PLOT | AFTER BUILD SERVICE COST PER PLOT | COST SAVINGS |
X 5 | £22,476 | £550 | £109,630 |
X 10 | £11,238 | £500 | £107,380 |
X 25 | £4,495 | £450 | £101,125 |
X 50 | £2,247 | £400 | £92,350 |
X 100 | £1,123 | £275 | £84,800 |
X 200 | £561 | £220 | £68,200 |
Example: A developer completing 25 plots and providing their own After Care will be spending £112,378 over 2 years, which works out at £4,495 per plot.
By contrast, outsourcing After Care to After Build would cost just £450 per plot (again over 2 years) which is an overall cost saving of £101,125!!!The difference is staggering. If your options are:
1. Provide no After Care (not really an option)
2. Try and provide your own internal After Care (see costs above)
3. Outsource After Care (makes absolute sense)
It’s not that difficult to see which is the most sensible option. After Build provide fixed price After Care from as little as 30 pence per plot per day.
So, when you next review your development budget, keep in mind that there are cost savings to be achieved, without sacrificing After Care.
Want to know more?Contact Mark Fawcitt (Director of Sales and Marketing) After Build Mobile: 07342 037810 or Email: markf@afterbuild.com
Comments