“How much should I charge?”
It’s the question every architect asks at some point, whether you’re just starting out or have years of experience under your belt. But here's the truth: there isn’t a one-size-fits-all answer. In fact, according to the Royal Institute of British Architects (RIBA), fees can range from 1.5% to 20% of a project’s total cost, depending on the scope and complexity. That’s a huge gap!
Pricing strategy is one of the biggest challenges for architects, particularly in 2024 as the industry faces shifting client expectations, inflationary pressures, and the push for more sustainable building solutions.
Whether you're pricing your services for a simple home extension or a multimillion-pound commercial project, the way you set your fees can make or break your business. If your pricing is too high, you risk alienating potential clients. Too low, and you may undervalue your work and compromise your bottom line.
In this guide, we’ll break down the most common pricing strategies for architects, including hourly rates, fixed fees, and charging a percentage of construction costs. I’ll also share some actionable tips to help you choose the best pricing strategy for your firm, whether you're just starting or looking to refine your approach.
With some careful planning and the right data, you can make sure you're charging what your expertise is truly worth.
Common Architect Pricing Strategies
There are three primary pricing methods architects use: hourly rates, fixed fees, and percentage-based pricing. Each of these strategies has its pros and cons, and understanding which one to use depends largely on the project type, your business model, and the client’s expectations. Let’s take a closer look at each one.
Hourly Rate: Pros and Cons
Charging by the hour is a straightforward method many architects use, particularly for smaller projects or clients who need flexibility. Hourly rates allow you to charge for every moment you spend on the job—ideal when projects have unclear scopes or might require lots of revisions.
Pros:
Flexibility: You can easily adjust fees for added time or scope creep.
Simplicity: Clients know they’re paying for the actual hours you work.
Cons:
Uncertainty: Clients may worry about runaway costs if the project scope isn’t well-defined.
Harder to scale: Hourly rates can limit your earning potential if you’re working on larger projects.
Example: If you charge £100 per hour and work 100 hours on a project, your fee would be £10,000. It’s a simple structure, but it doesn’t always give clients confidence in the final price, which could lead to friction.
Secret Tip: If you need to charge on an hourly basis, but you don't want to scare the client - put a fixed-cap on your hourly rate. That way the client knows there won't be runaway costs.
Fixed Fee: Pros and Cons
Fixed fees offer more clarity and certainty for clients. This pricing strategy involves agreeing on a set price for the entire project, no matter how long it takes you to complete it. It’s a popular option for larger projects where clients want a clear understanding of costs upfront.
Pros:
Predictability: Clients know exactly what they’ll pay from the start.
Efficiency: You’re incentivised to work efficiently since you’re not tied to time spent.
Cons:
Risk: If the project scope grows unexpectedly, you could end up doing more work without extra pay.
Complexity: Setting the right fixed fee requires accurate project scoping and cost prediction, which can be tricky.
Example: You agree to design a home for a fixed fee of £20,000. Even if the project takes longer than expected, the client’s cost remains the same. While this is attractive to clients, you need to ensure your pricing allows room for unexpected challenges or delays.
Percentage of Construction Costs: Pros and Cons
Charging a percentage of the construction costs is another popular pricing method. This model is commonly used for larger projects where the construction budget is substantial. Your fee is tied to the total cost of the project, which can create a strong alignment between your interests and the client’s.
Pros:
Scalable: As project costs increase, so do your fees.
Value-based: Clients feel they’re paying in proportion to the overall scale of the project.
Cons:
Unpredictable: Changes in construction costs can affect your fee, leading to disagreements.
Client perception: Some clients may feel this method incentivises architects to push for more expensive solutions.
Example: If a project’s construction costs are £500,000 and you charge 10%, your fee would be £50,000. This method works well for larger, more complex projects but can lead to uncertainty if construction costs fluctuate.
Pricing Architectural Services Separately
Not every client will want (or need) a full-service architectural package. For these cases, you can price individual services separately. This method allows for flexibility and can attract a wider range of clients who may only need specific services, such as planning applications or project management.
You can calculate your break-even hourly rate + profit to then multiply by the amount of hours you think the task will take. If you don't know your break-even hourly rate, check out our cost-rate calculators within our financial toolkit.
Charging Fees for Architectural Drawings
Architectural drawings are a key deliverable, and pricing them separately can be a smart move. The fee for drawings often depends on the project stage—whether it's concept drawings, planning application drawings, or technical drawings for building regulations.
For example, you might charge £1,500 for a set of planning application drawings but £5,000 for full technical drawings. Offering tiered pricing like this ensures that clients know exactly what they’re getting at each stage.
NB: Make sure you allow enough contingency in your fee proposal. The last thing you want is cashflow issues. I personally invoice on a monthly basis based on how much work has been completed. This means I'm not tied to having to get the client to confirm the end of the stage before I can send an invoice.
Charging Architect Fees for Planning Applications
Planning applications can be time-consuming, and some architects choose to charge separately for this service. Rather than bundling the cost into a larger project fee, offering planning application services as a standalone option can be attractive to smaller-scale clients.
You might charge a flat fee of £2,000 for preparing and submitting a planning application. This approach gives clients transparency and helps justify the work involved. You can outline all the work required, such as application forms, block & location plans, issuing planning certificates, meeting planners and other stakeholders on site.
Charging Fees for Project Management
Project management / Contract Administration is another service that can be billed separately. Whether you’re overseeing contractor work, administering the construction contract, or handling site inspections, charging a percentage-based fee for project management can streamline this process.
For example, you could charge 5-10% of the total construction budget for managing the project from start to finish. This allows clients to see the value in your continued involvement and creates a clear link between your fees and the project’s success.
Best Pricing Strategy for Your Architecture Firm
The best pricing strategy depends on your business model, the type of clients you work with, and the projects you undertake. Hourly rates might work for smaller, short-term projects, while percentage-based fees are better suited to large-scale developments. Fixed fees can provide peace of mind for clients, but they require careful planning on your part.
Ultimately, the goal is to find a balance between profitability, client satisfaction, and your firm’s capacity. Experiment with different models and don’t be afraid to adjust your strategy as your business evolves. By having a clear, transparent pricing structure, you’ll build trust with clients while ensuring your firm is financially sustainable.
Want more help with fee proposals or pricing your services? Check out our Fee Proposal Templates to streamline your process and help educate your clients. It's going to get you more fees, better clients and an improved work-life balance.
Until next time,
- Tim
