How Much Deposit Should a Builder Ask For?
There is no single correct figure. There are clear principles that tell you whether a deposit is sensible. Here they are.
The short answer
Enough to secure the job. Proportionate to what the contractor commits upfront.
There is no single amount set by law. A sensible deposit is one that secures your place in the contractor's diary and covers the genuine costs they commit to before starting, such as ordering materials, and no more than that. It should be set out in the written quote before you accept, paid to the business named on the quote, and recorded with a receipt. On jobs coordinated by Mortaro, for example, the deposit is 25% on acceptance, with the balance due on completion.
The right figure depends on the job. What you can always judge is whether the deposit is explained, agreed in writing and in proportion to the work.
The purpose
What a deposit is for
A deposit does two jobs. It shows the contractor you are committed, so they can hold a start date for you and turn other work away. And it helps with costs they carry before the job begins, particularly materials ordered specifically for your project.
Seen that way, the size of a deposit should make sense against the job. A contractor ordering made-to-measure items has more upfront cost than one doing a repair from standard stock. Asking what the deposit covers is a fair question, and a good contractor will be able to answer it. The guide to building deposits explained covers this in more depth.
A deposit is also different from paying for work in advance. It secures the job; the main payments should follow the work as it is done.
The principles
Six signs of a sensible deposit
It's in the written quote
The amount and when it is due are stated before you accept, not added afterwards.
It's proportionate
It bears a sensible relation to what the contractor commits before starting, and they can explain it.
It follows your acceptance
You pay once you have read and accepted a written quote, not before you have one.
It goes to the named business
Payment is made to the business on the quote, or to an agent the quote names, and the account details make sense.
It's paid traceably
By bank transfer or card, not in cash, so there is a clear record. See should I pay a builder in cash?
It's receipted
You get a receipt or confirmation showing what was paid, when, and for which job.
Beyond the deposit
How the rest is paid matters too
The deposit is only the first part of a payment arrangement. On shorter jobs the rest is often due on completion. On longer ones it may be split into stages tied to progress. What you want is a schedule where payments follow work done, so you are not far ahead of the job at any point. See staged payments explained and what is a payment schedule?
If a contractor asks for a deposit that seems large for the job, ask what it covers. There may be a good reason, such as bespoke materials. If the explanation doesn't add up, or you are pressed to pay before you have a written quote, take time before deciding. Our answer on whether it is normal to pay a deposit covers the wider picture.
Checking a deposit request
Four questions to ask
What does the deposit cover?
Booking the start date, materials to be ordered, or both. The answer should make sense against the job.
When is it due?
Normally once you have accepted a written quote. If you are asked for money before that, ask why.
Who is it paid to?
The business named on the quote, or an agent the quote names. Check the account details match.
What happens to the rest of the price?
Know when the balance or any stage payments fall due, and what each is tied to.
If you use Mortaro
A 25% deposit, then the balance on completion
Nothing is paid before you accept your quotation. On acceptance, a 25% deposit secures the works, and the balance is due on completion. Both payments are legally made to your appointed main contractor, who is named in your quotation. We receive them as the contractor's payment administration agent and pass them on without unnecessary delay. We do not hold client funds. You pay by bank transfer. Payments explained sets it all out.
Straight answers
Questions about deposit size
Is there a legal maximum deposit for building work?
There is no single fixed limit for domestic building work. What matters is that the amount is agreed, explained and fair. This is general information, not legal advice.
Should I ever pay the full price upfront?
Paying for the whole job before it starts leaves you with little say if things go wrong. Payments that follow the work are the sensible pattern.
Why might a deposit be larger on some jobs?
Where materials are made to order or expensive to buy in, the contractor's upfront cost is higher. A larger deposit can be reasonable in that case, provided it is explained and agreed in writing.
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