How much should I pay a builder up front?

Money on a building job is really about leverage. The amount you have not yet paid is the only practical influence you have over what happens next, and every payment made in advance of work done converts leverage into risk. A payment schedule is not a cashflow arrangement; it is a risk allocation, and it should be agreed before anyone starts.

Safety

Step by step

1. Decide what the deposit is actually for.Materials ordered specifically for your job — a made-to-measure staircase, bespoke joinery, a specific kitchen — are a legitimate reason for a deposit. General working capital is not, and a builder trading properly does not need your money to start your job.
2. Keep any deposit modest and tie it to something.Ask what it is buying and ask for the supplier's order or invoice. A deposit against a named order is very different from a round number requested on signing.
3. Set milestones against physical, inspectable progress.Foundations complete and passed by building control; structure up and weathertight; first fix complete and inspected; plastering complete; second fix and fittings complete. Each one is something you can stand in front of.
4. Never pay against dates.A payment due at the end of week three is due whether or not week three produced anything. A payment due on completion of first fix is due when the first fix exists.
5. Keep the money behind the work, always.At every point in the job, the value of the work completed should exceed the value of what you have paid. If that reverses, you are funding the project rather than buying it.
6. Agree a retention and put it in the contract.A small agreed percentage held back, released after the snagging list is cleared and any defects appearing during an agreed defects period are put right. Agree the percentage and the period in writing at the start — retention negotiated at the end is retention refused.
7. Pay traceably.Bank transfer to a business account, or card. Keep every payment reference and every invoice. Cash leaves you with nothing to show and no route to any card protection.
8. Consider paying at least part by credit card where you can.Card payments can carry protections that a bank transfer does not, with their own thresholds and conditions. The detail is in the separate Section 75 and chargeback guides — the point here is simply that the payment method is a decision, not an afterthought.
9. Verify bank details by voice before any large transfer.Invoice interception fraud targets building projects specifically, because the sums are large and the emails are expected. Ring the builder on a number you already had, not one on the invoice, and confirm the account.
10. Do not release the final payment until you are finished snagging.The last payment is the last leverage. Walk the job, list the defects, agree the list in writing, and pay when it is done — not on the day the van leaves.

Tips

• If a builder genuinely cannot fund the start of a job without a large payment, that is information about the business rather than about your job.
• Photograph the job at every milestone before releasing the payment for it. Two minutes on your phone, and it is the record that settles almost any later argument.
• Where you are supplying materials, agree in writing who is responsible for them on site. Your kitchen sitting in the garage is usually your risk, not theirs.

Common mistakes

• Paying a large deposit to secure a start date — It transfers all the risk to you before any work exists, and it is the exact pattern of the commonest building fraud. A start date is secured by a contract, not by a payment.
• Letting payments drift ahead of progress — It happens gradually, through goodwill, and it ends with a partly finished job that has been fully paid for. Check the balance at every stage rather than at the end.
• Paying the final invoice on the last day — Snagging is done after the work stops, and the money is what gets snags fixed. Agree the retention up front so this is not a negotiation at the end.

Questions people ask