Both are legitimate ways to price building work, and the right one depends far more on how well-defined and how predictable the job is than on which sounds safer.
A fixed price is a single agreed sum for a defined scope. Cost plus charges the actual cost of labour and materials plus an agreed margin, with the final total only known once the work is done.
What a fixed price actually fixes
A fixed price only genuinely protects the client if the specification behind it is detailed and complete — materials, fixtures, finishes and the exact scope of work all written down. A fixed price against a vague specification just moves the argument to what was actually included, usually discovered partway through the job.
Where the scope is well understood — a new-build extension on a clear drawing set, a kitchen refit with a chosen specification — fixed price gives real budget certainty and transfers the risk of the job taking longer or costing more onto the builder.
Where cost plus is the honest option
Jobs that involve opening up an existing structure — stripping back an old wall, digging foundations near an unknown services run, or working inside a period building with unpredictable existing fabric — carry genuine unknowns that no builder can price accurately in advance without either inflating the fixed price to cover every possibility or taking on risk they'll try to claw back through variations.
Cost plus prices what's actually found and done, with a transparent margin on top, which avoids both the padded fixed-price quote and the disputed variation orders that often follow when unknowns get discovered under a fixed contract.
The risk in each for the homeowner
Under fixed price, the main risk is scope creep — every change or addition outside the original specification becomes a variation, priced separately, and these can add up quickly if the specification was loosely defined at the outset.
Under cost plus, the main risk is an open-ended total with no ceiling. This is manageable with a builder you trust and a not-to-exceed estimate or a running cost report, but it removes the budget certainty that makes fixed price attractive in the first place.
Getting the best of both
A written itemised quote for the known, well-defined scope, with an explicit provisional sum or cost-plus arrangement for the parts of the job that genuinely can't be priced until they're opened up, is the most honest structure for most renovation work involving existing buildings.
This means the client isn't paying inflated contingency built into a fixed price for risks that may never materialise, but still has cost certainty over the bulk of a straightforward job.
Common questions
Which is more common for a straightforward extension?+
Fixed price is the norm for a new extension built to an agreed drawing set and specification, because the scope of work is genuinely knowable in advance from the design.
Can a fixed price still change after work starts?+
Yes, through a formal variation if the client changes the specification, or if something genuinely unforeseen is found once work is opened up — this should always be agreed and priced in writing before the additional work proceeds, not discovered on the final invoice.
How do I control cost under a cost-plus arrangement?+
Ask for a not-to-exceed estimate or regular running cost updates through the job, and agree the margin percentage on materials and labour in writing before work starts, so there's no ambiguity about what 'plus' actually means.
Ask us for a written itemised quote
We'll tell you honestly whether your job suits a fixed price or needs a provisional sum for the unknowns, before you sign anything.