Why Home Renovations Go Over Budget — and How to Stop It

You got three quotes for the kitchen. You picked the middle one: €25,000, fixed price, six weeks. Eight weeks in, the tiler found damp behind the old units, the countertop you ordered is out of stock so you went to the next level up, and your partner decided — reasonably — that while the wall is open you might as well move the socket. You're at €33,000, the kitchen is still a hole, and nobody is quite sure when it will end.

This is the shape of the "renovation overrun" that every homeowner eventually meets. And the Houzz 2026 Home Study confirms it's the rule, not the exception: 37% of homeowners who renovated in 2025 spent more than they planned. Only 3% came in under. (Houzz 2026 U.S. Houzz & Home Study).

The overrun isn't random. It comes from four specific places, in a predictable order. Once you can name them, you can budget for them — and stop blaming "unexpected costs" for something that was always going to happen.

How much are we actually talking about?

The Houzz data reports how often budgets get blown. The size of the blow depends on the project, but the ranges are consistent across markets:

UK: The average UK home renovation in 2024 cost £76,690, per Checkatrade, with three-bedroom renovations landing between £43,530 and £110,350. Checkatrade's 2025 Cost Index put renovation inflation at 6.5% year-on-year (Checkatrade Home Improvement Index Q2 2025).

Spain: A reforma integral runs €500–€700/m² for basic finishes, €800–€1,000/m² for mid-range, and €1,200+/m² for high-end — so renovating an 80 m² flat in Madrid sits in the €52,000–€100,000 band before you pick a tile.

France: A rénovation lourde (gutted, replumbed, rewired) is €1,000–€1,600/m² in the provinces and €1,000–€2,000/m² in Paris (Hemea — Prix rénovation appartement 2025).

Germany: A full Altbausanierung lands at €400–€1,000/m², and Destatis recorded new-build price inflation of +3.2% YoY in May 2025 — renovation costs tracked similarly.

Netherlands: €1,000–€1,800/m² for a full verbouwing, with Dutch builders explicitly advising a 10–20% buffer on older homes.

Portugal: A complete T2 remodel (70–90 m²) runs €40,000–€70,000; a 100–150 m² house lands at €60,000–€120,000.

A 30% overrun on a Spanish mid-range reform isn't "oh well" money. On an €80,000 project it's €24,000. That's a second bathroom, or the fund you'd meant to keep for the first six months after moving in.

The four sources of overrun, ranked

The Houzz study asked homeowners why their project went over. The top five answers — higher-than-expected costs, more expensive material choices, underestimated complexity, scope changes, and unexpected construction issues — collapse into four real categories. Ordered below not by Houzz's frequency ranking, but by how much leverage you have to prevent each:

1. Estimating error — the first one you can stop at the quote stage

Your quote was an estimate, not a price. Unless the contractor has literally written "fixed price" and specified every material, several line items were informed guesses — tile quantities, wire runs, how long the plasterer takes. When those guesses land 10% high, nobody notices. When three land 10% high on the same project, you've lost a week of runway.

The fix is boring: force every quote to specify which lines are fixed and which are estimates, and apply a 10% buffer to the estimated lines when you set your budget. If your contractor won't mark the distinction, that tells you something.

2. Scope creep — the only category fully in your control

This is the socket your partner wanted moved. It's the "while the wall is open" upgrades, the "we might as well also" decisions, and the extra coat of paint you didn't originally price. Each individual call is reasonable. The sum is catastrophic.

Scope creep is the source professional project managers watch most carefully because it's the only one that's fully under your control — every change was a choice you made. The system to stop it is called a change log: every decision that adds work gets written down with its cost before it happens, not discovered in a subtotal three weeks later. When the tile guy says "adding that border is another €400," you write it in and your partner signs off before he orders the tile. No verbal upgrades.

3. Material upgrades — the contagious one

You specified mid-range cabinets. You walked into the showroom and saw the next tier. The Houzz 2024 U.S. Kitchen Trends Study found the median major kitchen remodel (all cabinets + appliances replaced) was $55,000 — up 22% since 2022 (Houzz Kitchen Trends Study). A chunk of that increase isn't inflation; it's homeowners upgrading to a level they hadn't originally priced.

Material upgrades live adjacent to scope creep but behave differently. They compound: upgrade the cabinets and the tile feels cheap, so you upgrade the tile, and now the tap doesn't match. Lock your finish level before the build starts. If you must upgrade, upgrade one thing and accept that the others stay.

4. Hidden conditions — what you plan for, not prevent

The damp behind the plaster. The joist that isn't where the plans said. The asbestos nobody flagged. These are the genuine surprises, and they're the one category where the rule of thumb is explicit: 10–20% contingency on newer builds, up to 25% on older properties with concealed structural or plumbing unknowns, per the standard industry guidance (BEST Techs Contracting — contingency fund guide).

Dutch builders call this out loudest — buy a house from before 1970 and your onvoorziene kosten buffer should be 20% minimum, because you cannot know what's behind the walls until they're open.

The budget that actually holds

The renovation budget that survives contact with reality has three distinct buckets, not one total:

Quoted — the signed, line-itemised contract. Don't touch this number once work starts; it's your baseline.

Contingency — 10–25% depending on the age and complexity of the property, ring-fenced for genuine surprises (category 4 above). This money is already spent in your head. You should be slightly disappointed if you don't use it.

Scope & upgrades fund — a separate, smaller pot (5–10%) that handles the voluntary changes. Calling this out separately is the trick, because it forces every "while the wall is open" decision to compete for a finite pool. When the fund is gone, the upgrades stop.

On an €80,000 Spanish reform, that looks like: €80,000 quoted + €16,000 contingency + €6,000 scope fund = €102,000 total cash commitment. That's the real number. Anything less and you're planning to go over.

Why most overruns are invisible until the end

Here's the mechanical problem. You get quotes on email. Invoices arrive on paper. Your partner's €400 tile upgrade lives in a WhatsApp thread. The builder's €1,200 change for the rerouted pipe is a verbal note on the site visit. Three different costs, three different channels, no running total.

By the time you do the maths — usually when the penultimate invoice lands — you're €8,000 over and there are no decisions left to reverse. The overrun wasn't created at the end. It was created in the forty small moments where nobody wrote the number down.

This is why homeowners who come in on budget almost always share one habit: every decision, quote, invoice, and change is logged the day it happens, against the original number, with the receipt attached. The renovation is a project with a ledger, not a vibe with a running total in your head.

This is precisely what CasaTab was built for. The renovations category holds every line — quoted, paid, pending — with the scan of the invoice attached and the running delta against your baseline visible every time you open the app. When your contractor says "that's going to be €400 more," you see immediately whether the scope fund covers it, or whether you've just agreed to push into the next category. Track your renovation in CasaTab and the number at the end is the number you planned for.

What to do tomorrow, if you're mid-project

If you're already underway and already nervous:

Stop. Write down every number that has actually been committed — not just paid. Invoices, quotes, verbal changes, the €300 you handed the tiler in cash. All of it.

Compare to your original quote. The delta is your current overrun. Seeing it once is more motivating than seeing it guessed at for a month.

Freeze scope. No more "while you're here." Every new change is written, priced, and signed before work happens.

Accept the category-4 number. If you've hit hidden conditions, that money is gone — but you can still protect the rest by refusing further upgrades.

The Houzz data gives the honest picture: one in three projects goes over. But the same data shows 35% coming in at budget, which means the system works — when you use one.

The takeaway

The renovation overrun isn't an act of God. It's four known categories, each with a known counter. The contractors who finish on budget use a ledger. The homeowners who finish on budget use one too. The ones who don't, don't — and they pay the difference in cash they didn't plan to spend.

Every cost you don't track is a cost you can't control. For a €60,000 renovation that ends in an €18,000 surprise, the system that would have caught it costs you five minutes a day. That's the whole trade.

See the full breakdown of what buying a house actually costs for everything that sits around the renovation — the fees, taxes, and moving costs that add up to the number you're really spending.