Before you pay
Builder deposit: what’s normal, and what’s a warning sign
A normal builder deposit in the UK is 5–20% of the contract price — often nothing at all for small jobs — with the rest paid in stages against work done. Builders differ from kitchen or staircase suppliers: little is manufactured in advance, so there is less to fund up front. A builder asking for a third or half of the price before starting is outside the normal range, and how you pay the deposit matters as much as its size.
Key facts
- For building work — extensions, lofts, renovations — 5–20% up front is normal, and established builders often ask for nothing until materials arrive (SafeToPay deposit guidance, methodology v1.1; consistent with Federation of Master Builders and Citizens Advice guidance).
- Stage payments against completed work are the industry norm; standard contracts (JCT Homeowner, FMB contracts) are built around them.
- Any part of a contract between £100 and £30,000 paid by credit card brings the whole contract under Section 75 of the Consumer Credit Act 1974.
- Building disputes are the most common home-improvement complaint category reported by Citizens Advice, and deposits paid by bank transfer to a failed builder are unsecured claims.
- Many builders are sole traders — not on Companies House — which changes what you can verify, not whether they are genuine.
What a normal builder deposit looks like
| Job | Typical deposit | Then | On a £40,000 extension |
|---|---|---|---|
| Small works (under ~£5,000) | 0–10% | Balance on completion | — |
| Extension, loft conversion, renovation | 5–20% | Monthly or milestone stages | £2,000–£8,000 |
| Job with long-lead materials (steels, bespoke windows, roof trusses) | 10–20%, or pay the supplier directly | Stages | £4,000–£8,000 |
| New build / large project with a JCT contract | Often 0% — first valuation after month one | Certified stage payments | £0 up front |
Why some deposit can be fair
A genuine builder has real up-front costs on some jobs: scaffolding hire, skip permits, ordering steels or trusses that are made to measure. A deposit that mirrors those costs — with the quote saying what it covers — is reasonable. A deposit that is just “30% to book us in” is the builder using your money as working capital, and it puts you at the back of the queue if anything goes wrong.
An alternative that removes most of the risk
For long-lead materials, offer to pay the supplier directly: the steel fabricator or window manufacturer invoices you, the builder handles the order. You own what was bought, the builder funds nothing, and the deposit question mostly disappears.
Why builders are different from kitchens and staircases
A kitchen supplier or a staircase maker manufactures your order before installation, so 30–50% up front is normal there — the deposit buys materials and workshop time. A builder mostly buys materials week by week as the job progresses. That is why the normal builder deposit is a quarter of what bespoke trades charge, and why “50% up front” from a builder is a different signal than the same words from a joiner. One number, two meanings; the trade decides which.
The warning signs, in order of seriousness
Serious — do not pay until resolved
- A large deposit with pressure: 30–50% up front, “price only valid today”, or a discount for paying the whole job now.
- Cash only, or a personal account: a deposit to an account that does not match the business name on the quote.
- No written quote or contract: nothing naming the parties, the price, the stages and what the deposit covers.
- The register disagrees with the story: overdue accounts, a strike-off notice, or a company formed months ago claiming decades — the things a free company check shows in the first line.
Worth a question — often innocent
- A young company with an honest story: many good builders incorporate after years as a sole trader; the question is whether the website admits it.
- Mobile number only: normal for a one-man band, worth pairing with an address and reviews that have some age.
- A deposit for materials without an itemised reason: ask what is being ordered and when; a genuine builder answers in a sentence.
- Tiny net assets on the accounts: normal for small firms (profits are drawn out) — it just means the deposit is unsecured, so pay it by card.
A stage schedule to propose
Builders expect stage payments; the only negotiation is the shape. This one ties every payment to something you can see, keeps the deposit at the low end, and holds back enough to get snags fixed.
| Stage | Share | Trigger | On £40,000 |
|---|---|---|---|
| On signing | 10% | Written contract naming the business, the price and this schedule; at least £100 of it by credit card | £4,000 |
| Shell complete | 30% | Foundations, walls, roof structure done | £12,000 |
| Watertight | 25% | Roof covered, windows and doors in | £10,000 |
| First fix done | 20% | Electrics, plumbing, plastering complete | £8,000 |
| Completion | 10% | Building control sign-off where required | £4,000 |
| After snagging | 5% | Snag list cleared, 14 days after completion | £2,000 |
Rules that make the schedule work
- Pay for work done, never work promised. If the builder is ever more than one stage ahead of the money, the schedule has failed.
- Put the first payment on a credit card — at least £100 — so Section 75 covers the whole contract up to £30,000. For larger projects, Section 75 does not apply above £30,000; stages and direct supplier payments are the protection.
- Never act on “new bank details” mid-project. An email changing the account is the classic mid-job fraud; phone the number on the original quote first.
- Re-check the company before each stage — a build takes months, and directors, addresses and filings change. Re-checks are part of what the report’s watch plan is for.
Checking the builder before you pay
Ten minutes, in this order: the five-step legitimacy check on the company; the Companies House record if it is a limited company — status, accounts, incorporation date against the website’s claims, the directors’ other companies; or the sole trader checks if it is not. Then reviews with age, and the scheme registers: FMB (Federation of Master Builders — members are vetted and inspected), TrustMark, and for the trades within the job, NICEIC/NAPIT and Gas Safe. A logo on the van proves nothing; a search on the scheme’s own register does.
Building services firm, £16 in the bank, still quoting
The website: ten years of experience, TrustMark and NICEIC logos, a form inviting deposit payments. The register: company formed in 2020, a compulsory strike-off notice in the Gazette, latest accounts showing £16 in cash, no reviews anywhere, and neither logo matching a registration. A deposit paid the week we checked would have gone to a company in the process of being dissolved — no liquidator, no one to claim against. Every fact was free and public.
Loft and extension company with net liabilities
Nine years on the register, 40+ reviews, proper address — and latest accounts showing net liabilities of £111,000: the company owed more than it owned at its year end. That can be a director’s loan and often is; it is still a fact to resolve before handing over £8,000. The right response: ask (“your accounts show net liabilities — what’s behind that?”), keep the deposit at 10%, pay it by card, and stay one stage behind with the money.
Enter a website address, e.g. aurelia-builders.co.uk
Frequently asked questions
How much deposit should I pay a builder?
5–20% for extensions, lofts and renovations, and often nothing for small jobs — with the rest in stages against completed work. Deposits of 30–50% are normal for made-to-order trades like kitchens and staircases, not for building work.
Is it normal for a builder to ask for money up front?
A modest deposit is normal where there are real up-front costs — scaffolding, skips, long-lead materials — and the quote should say what it covers. “Half now to book us in” is not normal; offer stages or to pay suppliers directly.
Should I pay a builder’s deposit by bank transfer?
Not all of it. Put at least £100 on a credit card so Section 75 covers the whole contract up to £30,000; a deposit paid only by transfer is unsecured if the builder fails. What happens then is covered in our guide to transfers to a company that went bust.
What if my builder is a sole trader?
Common and not a warning sign. You cannot check accounts that don’t exist, so verify the name and trading address, VAT number if any, scheme membership and reviews with age — and keep the deposit small and on a card.
Can a builder insist on stage payments in advance?
A builder can propose any terms, and you can decline. The standard in the industry — and in JCT and FMB contracts — is payment against work done. A builder who refuses any schedule tied to progress is telling you how the project would go.
Is a builder asking for a big deposit always dodgy?
No. Some jobs genuinely front-load costs, and some excellent small firms want commitment before turning away other work. The point of checking the company first is to know which case you are in — then shape the payments so it doesn’t matter.