We get asked this more than almost anything else. Not always in those words. Sometimes it's "how does the pricing work?" Sometimes it's "what happens if something costs more than expected?" Sometimes it's a client who's been burned before and just wants to know they won't be burned again. The question underneath all of them is the same: who's carrying the risk on this build? The answer depends on which contract you sign. And signing the wrong one — or not really understanding the one you've signed — is one of the most common ways bespoke builds in Cornwall go sideways.
Fixed price — what it actually means
You agree a number before work starts. The builder delivers everything in the drawings and specification for that number. If things cost them more than expected, that's their problem. If they find ways to come in under, that's their reward.
Simple enough in principle. But there are a few things worth understanding before you assume "fixed" means what it sounds like.
What's fixed is the scope. The project as described in the drawings, on the day you sign. Everything in those drawings, for that price.
What isn't fixed is anything that wasn't in the drawings. Ground conditions that turn out to be worse than the survey suggested. A structural issue hiding behind an old wall. A planning condition nobody saw coming. These get handled through provisional sums — allowances written into the contract for things that can't be priced exactly at signing.
Fit-out is where this matters most. Joinery, finishes, fixtures, fittings — these are genuinely difficult to nail down at the start of a project. When they're not fully specified at contract stage, they sit as provisional sums. On a high-spec bespoke home, those sums can cover a significant proportion of the total budget. A fixed price contract doesn't protect you from movement in those figures. It just means the movement shows up as a variation invoice rather than a cost report line.
Warvena Construction · TrustMark Registered · Passivhaus Trust Listed · AECB Member Page 2 In the UK, most fixed price residential new builds run on a JCT Standard Building Contract or JCT Minor Works contract — the standard form for lump sum arrangements where the drawings are complete and scope is well defined
Cost plus — what it actually means
Instead of a single agreed number, you pay the builder's actual costs. Labour, materials, plant, subcontractors — whatever it genuinely costs. On top of that, you pay an agreed fee. Either a fixed management sum or a percentage of total costs.
Every invoice comes to you. Every subcontractor quote. Every material receipt. There's no margin hidden inside a lump sum. The builder's profit is the fee — nothing else.
What you get is visibility. Complete, ongoing, real-time visibility over where your money is going.
What you give up is a guaranteed final number.
That trade-off is real. If material prices move, if the ground is harder than expected, if the programme extends — you carry those costs. The builder's fee stays the same. The underlying costs don't. In UK residential construction, cost plus typically runs on the JCT Prime Cost Building Contract — a form built specifically for this structure.
Where Each One Works — and Where It Doesn't
Fixed price works in your favor when...
Your design is finished. Your site is understood. And you're using a mortgage or development loan — lenders almost universally require a fixed price contract, because they won't lend against an open-ended final figure. If you have complete Stage 4 technical drawings, a resolved specification, and a ground investigation done before tender, a fixed price can genuinely reflect what it costs to build your home.
Fixed price works against you when... The design isn't finished. A fixed price tendered against early-stage drawings isn't really a fixed price — it's an estimate dressed up in contract language. The builder has to price risk they can't fully see, so they build in contingency to protect themselves. You pay that contingency whether the risk ever materialises or not.
And there's the fit-out problem. Which most people don't encounter until they're standing in a half-built house wondering why changing their mind about the kitchen tiles is suddenly a formal contract process.
Cost plus works in your favour when... There are real unknowns on the project. An old Cornish building — stone, cob, listed — where you genuinely don't know what's behind the plaster. A coastal site with ground that hasn't been fully investigated. A new build where fit-out decisions haven't been made yet and probably shouldn't be made yet.
It also works well when you want to make decisions at the right time. Not twelve months before the building is ready. When you can stand in the space, see the light, and choose with confidence
Cost plus works against you when... The builder isn't right for it. Open-book only works when the books are genuinely open. You need proper cost reports, a clear invoicing structure, and a fee that doesn't reward dragging the programme out. Without those disciplines in place, cost plus can drift. The right builder makes it work well. The wrong one makes it expensive.
The Thing Nobody Really Talks About: Fit-Out Decisions Are Hard to Make Early
Every bespoke build we've delivered has had some version of this conversation. A client works with their architect for months. Samples get chosen. Finishes get specified. A mood board gets made. Everyone feels confident. Contract signed. Construction starts. A year later, the building is watertight. Fit-out begins. And things have changed. The kitchen they specified isn't available in that finish anymore. The tile has a fourteen-week lead time. The bathroom they drew on paper looks completely different in the actual room — the light comes from a different angle than the drawings suggested, the proportions feel different when you're standing in it. And honestly, after living with the idea for eighteen months, their taste has just moved on. None of that is unusual. None of that is a failure of planning. It's just what happens when you build something genuinely bespoke — the building teaches you things the drawings couldn't. Under a fixed price contract, every one of those changes is a variation order. Priced. Agreed. Documented. Time taken. Cost added. And a small friction created between client and builder that — repeated across an entire fit-out — adds up to something genuinely wearing.
Which Structure Suits a Bespoke Cornwall New Build?
Our honest position We lean towards cost plus on most bespoke new builds. Not because it's administratively easier for us — it isn't, open-book accounting requires real discipline. But because it's the more honest structure for the way these projects actually unfold. It gives clients room. Room to make decisions when the building is ready for them, not forced months in advance against a procurement schedule. Room to respond to what they discover as the project develops. Room to choose a kitchen in the actual space rather than on a screen. It removes the adversarial edge that variation orders can introduce — that moment where the client wants something and the builder has to say "that'll be a formal variation." It replaces that with a relationship built on transparency, where the client sees every cost and makes decisions with full information. For clients who need a fixed price — because a mortgage lender requires it, or because that certainty genuinely matters to them — we put serious work into the pre-construction phase to make the scope complete enough that the fixed price is real. Not an estimate. Not a best guess. A genuine reflection of what it costs. Warvena Construction · TrustMark Registered · Passivhaus Trust Listed · AECB Member Page 4
When fixed price is the right call A site with a completed ground investigation. A design at RIBA Stage 4 with everything drawn and specified. No outstanding planning conditions. A fit-out that's been fully resolved, not left as provisional sums to be dealt with later. That's a project where fixed price works properly. And it's worth working towards — because the process of getting there produces a better project regardless of the contract form. The contract should follow the project. Not the other way round.
Three Things to Resolve Before You Sign
1. How complete is your design?
There's a big difference between signing at RIBA Stage 2 and signing at Stage 4. The earlier the stage, the more the builder is estimating rather than pricing — and the more contingency ends up baked into the lump sum. If the design isn't finished, either wait until it is, or use a pre-construction agreement to develop it properly before you commit to a contract.
2. What do you actually know about the ground? Cornwall's ground is unpredictable in ways that are hard to overstate. Granite at shallow depth in one spot, made ground in the next. High water tables near the coast. Unstable soils on clifftop sites. A ground investigation before tender is what makes a fixed price genuinely fixed — without it, you're either paying a risk premium upfront or dealing with variations once construction has started. Neither is a good position.
3. How will you handle changes when they come? And they will come. Be honest with yourself about whether you're someone who will want to evolve decisions as the building takes shape. If you are — and most people are, for good reasons — a fixed price contract will make that process slower and more expensive than you expect. Cost plus is a better fit for how most bespoke clients actually work.
Frequently asked questions
What is the difference between a fixed price and cost plus contract?
The key difference is who carries the financial risk. With fixed price, the builder does — they deliver the agreed scope for the agreed sum and absorb any overruns within it. With cost plus, you do — you pay the actual cost of every element plus an agreed fee, with full transparency but no guaranteed final total.
Which contract type is better for a new build in Cornwall?
For most bespoke Cornwall new builds, we think cost plus is the more honest and more practical structure. Fit-out decisions are genuinely hard to finalise at the start of a build — tastes shift, products change, the building teaches you things the drawings couldn't. Cost plus gives you the flexibility to respond to all of that without penalty. For clients who need a fixed price for mortgage or finance purposes, thorough pre-construction work is what makes that price reliable.
Can a fixed price contract change after signing?
Yes — through variation orders. Any change to scope or specification is formally valued, agreed, and added to or deducted from the contract sum. Provisional sums — including most fit-out items that weren't fully specified at signing — are replaced by actual costs once known. Understanding those provisional sums before you sign matters as much as understanding the lump sum itself.
What does open-book mean in construction?
It means the builder shares their actual cost records with you — every invoice, every timesheet, every subcontractor quote. It's the principle that makes a cost plus contract work properly. On our cost plus projects, we provide regular cost reports showing real expenditure against the agreed budget. No surprises. You always know where you stand.
Does a fixed price contract protect me from all cost overruns?
No. A fixed price contract protects you from cost overruns caused by the contractor's own efficiency, labour cost movements and material price changes within their agreed scope. It does not protect you from overruns caused by changes you make to the scope, ground conditions worse than assumed, or provisional sum items that cost more than allowed. Understanding what is inside and outside the fixed price — before signing — is essential.
When would Warvena recommend cost plus over fixed price?
On most bespoke new builds in Cornwall, and on any renovation of an existing building where the structure and condition aren't fully known before work begins. Also when a site hasn't had a ground investigation. And whenever a client wants to make fit-out and finish decisions during the build rather than locking everything in at the start — which, in our experience, is almost always the right approach on a home this personal.
What is a JCT contract and do I need one?
JCT stands for Joint Contracts Tribunal — the body that produces the UK's standard-form construction contracts. For any bespoke new build or significant renovation, a JCT contract is the right legal framework. It covers payment terms, programme obligations, variations, defects, and dispute resolution in a balanced, industry-recognised form. Building without one leaves both parties significantly less protected.
THINKING ABOUT A HIGH-PERFORMANCE BUILD IN CORNWALL?
Warvena Construction are TrustMark registered builders based in Redruth, Cornwall. Listed on the Passivhaus Trust directory and members of the AECB, we work across Cornwall with private clients, architects, and developers on bespoke new builds, Passive House projects, coastal renovations, and commercial construction.