How stage payments for building work should be structured

Why pay in stages?

On anything larger than a small repair, paying the whole amount up front puts all the risk on you, and paying everything at the end puts it all on the builder. Stage payments share the risk. Each payment follows a visible piece of finished work.

What a stage looks like

A stage should be something you can see and check. For an extension, stages might be:

1. Foundations dug, inspected and poured.
2. Walls built to roof height.
3. Roof on and watertight.
4. First fix electrics and plumbing done, plastering complete.
5. Second fix, finishes and snagging complete.

The exact stages depend on the job. What matters is that each one has a clear "done" point, and that building control inspections, where they apply, line up with the right stages.

Matching payments to value

Each payment should roughly match the value of the work completed at that point. If the first stage is a small part of the job but asks for a large share of the money, you'll be paying ahead of progress.

A common pattern is:

• A modest deposit, linked to materials or securing a start date (see how much deposit a builder should ask for).
• Several stage payments of roughly similar value.
• A final payment on completion.
• Sometimes a small retention held for an agreed period.

Retentions

A retention is a small amount kept back after the job is finished to cover any defects that appear soon after. If you want one, agree it before the contract is signed, including:

• How much is held.
• How long it's held for.
• What happens to it if snagging isn't done.

Springing a retention on a builder at the end is unfair and can sour the relationship.

Variations and extras

Changes during the job — different tiles, an extra socket, something found when walls are opened — are called variations. Agree how they'll be priced and approved, ideally in writing before the work is done. Keep a simple running list so the final bill holds no surprises.

Keep records

For each payment, keep:

• The date and amount.
• What stage it was for.
• Photos of the work at that stage.
• Any building control inspection records.

This takes minutes and is invaluable if there's ever a disagreement.

Next steps

When comparing quotes, look at each builder's proposed payment schedule as carefully as the price. Estimo's quote comparison puts terms side by side, and the 10-point quote checklist helps you spot gaps.

Sources

• Consumer Rights Act 2015 — legislation.gov.uk
• GOV.UK — Building regulations approval