Refurbishing your home can be a large undertaking - it comes at an obvious and immediate expense and there are many things which most people automatically budget for when planning for their refurbishment. However, there are also many costs that people forget to include when budgeting or that they simply underestimate. We often find that some clients have an unrealistic expectation of what they can achieve for their money and they are disappointed when they find out that a large portion of their budget is eaten up before they know it into something that isn't even visible in the finished result.

Build Cheap, Build Twice: The most obvious and sizeable cost in a refurbishment is, of course, the cost of the building works. This is where we find most people vastly underestimate costs and receive the biggest shock, which leads to attempts at cutting costs and negotiating down at the expense of quality.
The old saying 'buy cheap, buy twice' certainly applies when choosing a building contractor and other skilled labourers to do the building works. Unless you're willing to get your overalls on and start painting the walls, there is not usually much room for cutting corners if you want things to be done well. Electrical work, Plumbing work and other skilled work including plastering is often what inflates the building works cost - and these are the areas that need to be done well.
Then there are the jobs that are down to your choice of finishes and fittings, such as laying wooden floors, tiling, kitchen fitting and custom joinery. These are prices that may go up or down slightly depending on the products you choose.
Don't forget that the builder is pricing not only for labour (think how many men per day and for how long), he is also pricing for a lot of building materials (paint, plasterboard, trims, nails etc), and it's important to check that all the materials needed to finish everything off nicely are included in the quotation. If things are shoddily finished, the outcome and completed look of the project won't do justice to the other areas where you've invested, such as the finishes and fittings.

Permissions and Admin: The building industry and builders themselves have the notorious reputation of not doing things 'by the book' when it comes to acquiring the relevant permissions - from the council planning and building regulations offices and from the freeholder and from neighbours, from the national grid for electrical / gas work etc. We often find that when we start on a new project, we find walls that have been previously removed without permission (and obviously without a structural engineer's recommendation), dodgy plumbing work and even worse, dodgy electrical work. Not getting the relevant permissions and the appropriate specialist recommendations (if a builder says a wall can be removed, it's not always the case!). Of course, submitting relevant paperwork and paying for specialists like structural engineers is an added cost but it's vitally important in order to avoid even costlier problems in the future.
The other cost that people often overlook when pricing a project is the 'admin' or running type costs, such as the need for skips, parking restrictions, scaffolding, specialist hire tools, legal fees for solicitors (if you are a leaseholder, for example, and need a Licence for Alterations)...the list goes on. Although many of the building works related items will be included in the builder's quotation, they are costs that you should be keeping in mind so that you know if your project is likely to cost more due to 'admin' issues. For example, if you live on the fourth floor and the staircase is too narrow to bring materials up, keep in mind that arranging for scaffolding or a hoist will be an additional cost in the builder's quotation.

Your Finishes and Fittings: What often comes as a shock to our clients is the cost of what we call 'Clients Materials' - finishes and fittings selected by the client. These will include everything from wooden floors, bathroom tiles, kitchen worktops, kitchen cabinets, bathroom sanitaryware, appliances, wallpaper etc. These items are not included in the builder's price (unless you have specifically asked them to be). This is where you have the most flexibility in terms of controlling the price of your refurbishment project, as it's down to you what type of finishes and fittings you go for. Many of our clients understandably want to go for the best quality when it comes to the 'visible' elements of the design. However, it's important to keep a separate budget total for the Client Materials as often this is where cuts will have to be made. We always advise our clients that a 'fabric first' approach should be adhered to when it comes to making these decisions - better to go for unbranded bathroom taps than to risk an unskilled plumber fittings the new shower drainage.

Changing Your Mind is Expensive: Everyone is entitled to change their mind - as designers, we are accustomed to last minute changes on site. However, as a builder, a client changing their bathroom layout last minute is not what you want. Not only do changes to the scheme on site change the builders costs, they increase the workload and delay the time table. Changing your tiles from the standard 300x300mm tiles to a limestone mosaic that takes 6 weeks to arrive can cause chaos on site. Suddenly deciding that the lighting in the kitchen is all wrong and you want to add LED strips under all the cabinets is fine as long as the changes are delivered clearly and as early as possible to the builders - and the client is aware and willing to accept the additional charges for these changes.
We always urge our clients to be 100% sure on the major points (items that relate to plumbing, electrics and layout) before the project is sent off for the final tender. Things will always develop and change during the building works stage (sometimes due to unforeseen circumstances) so it's important to have a contingency plan in case additional costs do arise.

Speak to your designer about your budget and be clear early on what your maximum spend is - they can help you put together a comprehensive budget that takes into account those little costs that often get forgotten about.