Many of us dream of building our own home and while it’s not the right option for everyone, self building could be an affordable way for you to get your ideal property. Yet fail to plan properly and you face the risk of financial ruin.
There can be little doubt that taking on a self build project is a big task which will take months, possibly years to complete.
No matter how moderate your plans it will be an expensive and stressful undertaking, so it’s not something that should ever be entered into lightly.
Yet despite these hurdles, more and more people in the UK are building their own homes, but why?
Why self build?
Firstly most self builds, if managed properly, should be worth considerably more than the standard construction costs upon completion. If all goes to plan this means you get your ideal home for a fraction of the market price.
Secondly, building your own home gives you the freedom to include features that may be impossible or at least very costly to install in other properties.
This is especially the case with regards to energy efficiency and green features. Luxuries such as under floor heating can also be added for a fraction of what it would cost to install them in an existing property.
Is it cheaper to buy?
Although there are many positives to building your own home, it is definitely not an easy task and is likely to take up a lot of your time.
So before pursuing your own self build project, it makes sense to thoroughly assess your local area to make sure that your dream property isn’t already ready and waiting for you.
If you do find a property that's a close match you need to work out whether you'd be able to build a replica for less than it would cost to purchase and rennovate the existing property.
If self-building doesn't come up much cheaper, going for the existing house is likely to be the more sensible option.
However, if you could build your own version for a fraction of the asking price, doing so is definitely worth considering.
You will, however, need to think carefully about whether such a grand project is something that you're really willing and able to undertake. Here's what you need to consider:
Your budget
Before you start stockpiling building materials and drawing up designs for your new castle, you will need to set out a budget. This is essential as the costs involved in a self-build project can easily spiral out of control if you fail to be realistic from the word go.
Firstly you'll need to research the likely cost of land, architect fees, builders, materials, fixtures, fittings and everything else you'll need when you build a property from scratch.
You'll then need to look at your finances and decide whether you can cope with such a huge financial commitment.
It's important to factor in ongoing as well as upfront costs when you're working this out. For instance, will you be able to afford to pay rent or a mortgage while working on the construction?
Many self-builders choose to move into a caravan or temporary residence on site to reduce their living costs until their new property is complete. Is this something you're happy to do?
You're also likely to have to keep your spending under strict control while the project is underway; if you're not so good at managing your money then a self build may not be the best option for you.
If you do the maths and self-build still looks like a viable option you'll need to consider how you'll finance the project.
Self-build mortgages
Securing funding for a self build is likely to be one of the most substantial hurdles you’ll need to overcome before construction can even begin. This is not least because the amount you're able to borrow will, in most cases, determine your final budget.
A self-build mortgage is specifically designed for anyone looking to build their own home. Unlike traditional mortgages they typically release the money in stages so you're able to pay for land, labour and materials as your build progresses.
It's also common for self build mortgages to vary the LTV you're able to borrow. For example you may be offered 75% of the cost of land but 85% of the projected building cost.
Additionally, because of their specialist nature, self build mortgages are often priced slightly higher than standard mortgages. You'll need to take this into consideration when you are working out how much it's likely to cost you to build your own home.
You're also likely to need a sizeable deposit up front before any lender will be willing to extend a self build mortgage your way.
You can use our self build mortgage comparison tables to compare the options available to you.
The location
Once you’ve decided that a self build is the way forward and have an idea of your budget, you can begin to search for your self build plot.
Finding a plot of land for your new home is the first and often the most crucial decision you need to make.
There are lots of things to consider and it's vital you're happy before taking the plunge.
There's a good chance that you will already have an idea of the area in which you want to live, but it is still worth doing a bit of investigation before looking at specific plots.
You should check sites like UpMyStreet.com to find out about the local facilities and police.uk to check crime levels.
Consider how you will get to and from work. Are you reliant on public transport? If this is the case you need to check what areas are best served by rail and local bus services.
If you have a young family you should also check the local schools' catchment areas when you're deciding where to buy land.
All these considerations are similar to if you are buying a pre-built property but are still equally as important when you're self building.
The land
When it comes to your hunt for land your choice will be limited by both your budget and the land available so you need to extend your search as widely as possible.
Speak to local estate agents, look at property websites (these often list land for sale) and check land auctions as a starting point.
However, it's also worth contacting your local council and check the Homes & Communities Agency website to see whether they have any suitable plots for sale.
Additionally you should investigate whether any land developers, local farmers or utility companies hold undeveloped land in the area you are interested in building in. If so, you should consider contacting them to find out whether they're open to offers.
Planning permission
Fail to get planning permission and your plan for a dream home could soon become a nightmare.
Without planning permission you have no legal right to start construction and if you do your council has the right to order the destruction of any work you do at your own cost.
Therefore it makes sense to check planning permission rigorously and to not actually buy a plot of land before suitable planning permission has been granted.
There are also two different levels of planning permission that you need to be aware of - outline planning permission and full/detailed planning permission.
Outline planning permission works by granting approval of an outline plan. This means that the plot has permission for a certain type of development to be built on it, but that specific construction plans have yet to be agreed.
If a plot has outline planning permission then you will have to submit a detailed plan for approval before construction can begin.
Note: Outline planning permission is usually valid for 3 years, before re-application is needed.
Detailed/Full planning permission is where a full construction proposal has been agreed in detail, for a specific build such as a 3 bedroom house, or 1 bedroom bungalow.
If you plans don’t match the planning permission you may need to submit further construction plans for approval.
You can use the planning portal website to find your local planning permission office, to check details of any planning applications that have already been granted, and to submit a planning applicaiton online.
Accessibility
There is little benefit to having a sizeable plot of land, in your ideal location, if you can’t access it.
Before buying a property check that there is built in access to public roads to allow you (and build traffic) to drive onto the site without having to pay for right of access over someone else’s land.
Fit for purpose?
Your search for land will be far easier if you have a clear idea of the type and size of property you want to build set out. This will not only enable you to see whether your plans are realistic (finding an undeveloped 13 acre plot in central London may be a little problematic for example), but also whether they're likely to be achievable with your budget.
For this reason it's also important to be flexible so that you're able to amend your plans if you can't find a plot that meets all of your requirements.
When you're visiting a plot that you think may be suitable you need to investigate it thoroughly.
Check that it isn’t in a flood plain, under a flight path or close to a rail line or large road, and make sure that there aren't any planned developments in the immediate vicinity (property, industrial or otherwise).
Find out whether there are any public rights of way across the land and whether you'd be happy with this.
Of course you'll also need to consider whether it's suitable for the property you want to build. Is there enough land for example. What are the views like and is your property likely to be overlooked by neighbouring homes?
It also makes sense to look at the market value of properties in the surrounding area and see how the cost of land compares. This will not only give you an idea whether the land is worth the asking price, it'll also help you to establish whether you're likely to ever make any profit on the home you plan to build should you come to sell it at a later date.
Purchase the plot
If you’ve found a plot that ticks all the boxes you will need to put in an offer.
You should treat the asking price of a plot as a starting point for negotiation and offer an amount you are happy to pay.
Don’t be afraid to go in with a low price first of all (particularly if you've had a mortgage approved in principle) as you can always put in a second offer if your first one isn’t accepted .
You won't need to pay any stamp duty whatsoever if you purchase a plot for less than £125,000, and only need to pay 1% stamp duty on plots costing between £125,000 and £250,000. You'll need to pay 3% if your plot costs between £250,000 and £500,000 and 4% on anything between this and £1million.
Keep these thesholds in mind when you're putting in an offer as it could make a big difference to the amount you need to pay out in total.
On the plus side, when you self build you only need to pay stamp duty on the cost of the plot itself, not on the value of the completed property.
Plan thoroughly
How many bedrooms and bathrooms will you need, do you need a large garden or are you looking at building an urban sanctuary?
You should also consider the size of each room in the home, are you looking for a large kitchen or would you be happy with a smaller cooking area in exchange for a larger living room?
You will need to be as specific in your requirements as possible while remaining flexible with how they are implemented to keep your costs down and ensure you stick to your budget.
Find an architect
Getting a good architect can be the key to realising your idea of your perfect home. It will also help you ensure you remain compliant with building regulations and help ensure your house remains structurally sound for many years to come.
An architect should be able to not only tell you what is affordable within your budget restraints but can also incorporate unique features to your property that wouldn’t be available in a standard construction.
They'll also be able to advise on construction practices and materials, help you apply for planning permission and even manage the build project should you wish.
You can visit the Architects Registration website to find a certified architect in your area.
Choosing the right architect is hugely important so it makes sense to book initial meetings with a number of different architects and to discuss your requirements, ideas and plans with each. You should also look at examples of their past work and, if possible, get case studies or testimonials from previous clients.
Doing so will enable you to engage the services of the architect that will not only provide you with a suitable design for your new home, but also will help to make the whole self build process as stress free as possible.
Consider a kit home
If you are looking to keep costs down and are not too concerned about the architectural appeal of your home then you may want to consider a kit house (sometimes referred to as a prefabricated house).
Kit homes are often much quicker to construct than a custom designed property and will mean that you don’t need to employ an architect, usually at considerable expense.
By their very nature you will be restricted to the designs on offer but they are an option worth investigating as an easier alternative to the traditional self build route.
Get full planning permission
Once your plan is completed, if your plot of land only has outline planning permission, or if you have made changes to the detailed planning already granted, you will need to get full/detailed planning permission before you can start work.
Choose your team
Picking the people who will help build your home is a crucial part of any self build project; it can also prove to be one of the mostly costly parts of the process.
Essentially every time you have to hire someone to do something you will pay a premium for their expertise so it's important that you choose your team carefully. Getting quality, reliable tradesmen on board will also help to ensure your property is well finished and that the build stays on track.
Take a long hard look at yourself
When faced with the prospect of having to hire people to work on a self build project, many people baulk at the costs involved. However, if you can take on some of the tasks yourself you can significantly reduce your outlay.
While certain jobs will need to be left to professionals, such as installing the electrics and water system, there are other jobs, such as plastering, interior design and decorating that you can take on yourself.
You may also want to consider taking on the role of project manager on your site, to avoid having to employ someone else to oversee construction. This will be a demanding task, however, so you should make sure you have the time and patience to adopt this role yourself.
Find builders
Once you are ready to find your building team and put your construction out to tender your work really starts.
You should speak to other people who have used construction staff to seek recommendations or use review websites to find contractors that are highly regarded in the local area.
You can search also for builders and check their details and qualifications on the Federation of Master Builders website.
Always ask for a price for the whole job, an estimated date of completion for the work required, and the number of workers needed up front (anything additional should be priced extra).
However, as a rule you should never go for a builder simply because they give you the cheapest quote - ask for examples of their work and speak to previous clients to check for quality.
Even if a builder comes on recommendation you should never pay the full amount up front. Instead agree to pay in instalments as this protects you against poor craftmanship.
Finally, where possible you should source materials yourself to cut costs (as you're able to shop around for the best price wheras the builder may be tied to a particular merchant).
Get insurance
Before work can begin you may need to take out relevant insurance to protect anyone working on the site.
There are lots of specialised site insurance policies available for self-builders, but if you are unsure what you require, speak to an independent financial advisor or insurance broker to discuss your needs.
Start the build
Once you have found your team you are ready to begin constructing your new home.
While the exact duration and obstacles you are likely to face are likely to be unique to you individual property, by putting in the ground work before construction you are much more likely to have a happy outcome with as little stress as possible.
Reclaim your VAT
The purchase of building materials for a self build project is exempt from VAT, so you'll be able to claim this back at the end of construction.
This can be a significant sum of money across the duration of your self-build project, easily running into the thousands of pounds so is defiantly worth doing.
Visit the HMRC website for details of how to get your money back.
