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How to build your own house

If you harbour a dream to build your own house, self-building could be a more affordable way for you to get your ideal property. But it’s not for everyone. If you don’t plan properly, you could risk getting into financial difficulty.

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If you’re going to build your own house, UK wide, you need to prepare for the fact that it’s going to take months, possibly even years, to complete.

No matter how moderate your plans, it’ll be an expensive and stressful undertaking. So building your own home isn’t something you should go into lightly. But, if you’ve ever wondered how to build a house, this guide could help you with your project.

Why build your own house?

  • If you build your own house it’s likely to end up worth a lot more than what it costs you to construct it – as long the project is managed properly. Technically, if everything goes to plan when you build your own house, you’ll get your ideal home for a fraction of the market price.

  • 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. For example, this could include energy efficiency and green features.

  • If you build your own house, luxuries such as underfloor heating can also be added for a fraction of what it’d cost to install them in an existing property.

Is it cheaper to buy a house or build your own house?

Before you start building your own home, check out your local area to make sure that your dream property isn’t already built and waiting for you.

If you find one that’s a close match, you can work out whether you’d be able to build a replica for less than the asking price of the existing home. If the existing property would need work, then don’t forget to account for renovation costs in your workings out.

If you could build your own version for a fraction of the asking price, it’s worth considering.

Before you plan to build your own house, work out your budget

The costs involved in building your own home can easily spiral out of control if you aren’t realistic. 

Make sure you consider the following:

  • Research the likely costs. This could include land, architects, builders, materials, fixtures, fittings, and everything else you need when you build your own house from scratch

  • Look at your finances and decide whether you can cope with such a huge financial commitment

  • Work out ongoing costs, such as if you’ll be able to afford rent or a mortgage while working on the construction.

It’s always a good idea to include some contingency in your budget in case something unexpected happens.

What affects the price of a self-build?

There are several factors that heavily affect the cost of building your own home.

These include:

  • Size: Of course a bigger house costs more to build

  • Location: Where you build your own house will have implications on the price of land and labour

  • Your involvement: If you can take on some of the work yourself you can reduce the price of the project

  • Floorplan: The floorplan, shape and layout of your home will affect the price. Did you know that square floorplans are the most cost-effective?

  • Storeys: Having several storeys can save money because it uses less land and reduces foundation and roof costs per square metre

  • Spec: Depending on how premium you want your home to be, the costs can vary significantly.

Get a self-build mortgage when building your own home

Unless you have lots of savings or equity in your existing home, it’s likely you’ll need a self-build mortgage.

A self-build mortgage is specifically designed for you if you’re looking to build your own house.

Unlike traditional mortgages, a mortgage to build your own home, UK wide, usually releases the money in stages. This is 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 loan to value (LTV) you’re able to borrow to build your own house. For example, you might be offered 75% of the cost of land, but 85% of the projected building cost.

Not all high street banks offer self-build mortgages, so you might need to talk to a specialist provider.

How much does a mortgage to build your own house cost?

Mortgages for building your own home are often priced slightly higher than standard mortgages.

You’ll also need a sizeable deposit up front before any lender will offer you a self-build mortgage.

Compare self build mortgages here.

Find the perfect location to build your own house

If you’re wondering how to build a house, then finding a plot of land is usually one of the first and often most crucial decisions to make.

Your choice of land will be limited by your budget and the land available. So you’ll need to extend your search as widely as possible if you want to build your own house.

Speak to local and online estate agents, look at property websites and check land auctions as a starting point.

Have a look to see if any developers, farmers or utility companies have undeveloped land in the area. If so, you could contact them to find out whether they’re open to offers.

It’s also worth contacting your local council and checking the Homes & Communities Agency website. Through these, you can see whether they have any suitable plots for sale.

Choose the right area to build your own house

There’s a good chance that you already have an idea of where you want to live. But it’s still worth doing a bit of investigation before looking at specific plots.

You should:

  • Check sites like POLICE.UK to investigate crime levels

  • Think about how you’ll get to and from work. If you use public transport, check what areas are best served by rail and bus services

  • If you have a young family you should also check the local catchment schools.

Consider accessibility

There’s little benefit to having a sizeable plot of land if you can’t access it.

Before buying a plot to build your own house, check that there’s access from public roads. Access will allow you (and construction traffic) to drive onto the site without having to pay for right of access over someone else's land.

What else you should check about the land on which you’ll build your own house?

To get the right plot on which to build your own house, you’ll need to make sure you ask the right questions.

Find out:

  • Is the land on a flood plain?

  • Is it under a flight path?

  • Is it close to a rail line or large road?

  • Are there any planned developments nearby? (property, industrial or otherwise)

  • Are there are any public rights of way across the land?

  • Is the plot big enough for your plans?

  • What are the views like?

  • Is your property likely to be overlooked by neighbouring homes?

You should also look at the market value of properties in the surrounding area and see how the cost of land compares.

This’ll give you an idea of whether the land’s worth the asking price. It’ll also help you work out whether you’re likely to make a profit if you sell the home later.

Get planning permission to build your own house

Without planning permission, you don’t have a legal right to start construction, so this is a necessary step. Your council could order the destruction of any work at your own cost if you build without getting planning permission first.

Check planning permission rigorously and don’t buy a plot of land until suitable planning permission has been granted.

It currently costs £462 to submit a planning application for a single house in England.

There are two levels of planning permission available. There’s outline planning permission and detailed/full planning permission.

Outline planning permission 

This 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 aren’t yet agreed.

If a plot has outline planning permission, you’ll have to submit a detailed plan for approval before construction can begin.

Note: Outline planning permission is usually valid for three years, before re-application is needed.

Detailed or full planning permission

This is where a full construction proposal has been agreed in detail, for a specific build. This could be for a three-bedroom house or one-bedroom bungalow, for example.

If your 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. Through this, you can check details of any planning applications that have already been granted. You can also submit a planning application online.

Once full planning permission is granted, you can start work.

Buy the plot

If you find a plot that ticks all the boxes, you’ll need to put in an offer so you can build your own house on it.

Treat the asking price as a starting point for negotiation and offer an amount you’re happy to pay.

Don’t be afraid to go in with a low price to begin with, especially if you’ve had a mortgage approved in principle. You can always put in a second offer if it’s not accepted.

Stamp duty to build your own house

When building your own home, you only need to pay stamp duty on the cost of the plot itself. You don’t pay any stamp duty on the value of the completed property, unlike when you buy an existing property.

The rules are:

  • You don’t pay any stamp duty if you buy a plot for residential use for less than £125,000 

  • After that, 2% stamp duty is charged on the next £125,000 (land value £125,001 to £250,000)

  • After that, 5% is charged on the next £675,000 (land value £250,001 to £925,000)

  • After that, 10% stamp duty on the next £575,000 (land value £925,001 to £1,500,000)

  • After that, 12% stamp duty (land value £1,500,001 and above).

The stamp duty threshold has been temporarily increased to £500,000 during the COVID-19 pandemic until June 30, 2021. This means that you will not have to pay any stamp duty for the first £500,000 of the purchase price of your home.

Plan thoroughly

You’ll need to be as specific in your requirements as possible when you do your planning to build your own house. However, you’ll also have to be flexible with how your plans are implemented, to keep your costs down and ensure you stick to your budget.

Think about the following:

  • How many bedrooms and bathrooms will you need?

  • Do you need a big garden or are you looking at building an urban sanctuary?

  • How large should each room be? Would you be happy with a smaller living room in exchange for a larger kitchen, for example?

Consider a kit home.

Find an architect

When you’re building your own home, getting a good architect can be the key to making your dream home a reality.

Having the right architect will mean you achieve the right, one-off design for your self-build home. It’ll also help make the self-build process as stress-free as possible.

Choosing the right architect is important. It makes sense to book initial meetings with several different architects. 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.

Your architect will:

  • Keep you compliant with building regulations and planning permission

  • Ensure your house is structurally sound

  • Tell you what’s possible within your budget

  • Incorporate unique features that are unavailable in a standard construction

  • Advise on construction practices and materials

  • Manage the build project if you want them to.

Find a certified architect in your area using the Architects Registration Board website.

Choose your team carefully

Every time you have to hire someone to work for you, you’ll pay a premium for their expertise. Choose your team carefully.

Having quality, reliable tradesmen on board will help you make sure your property’s well finished. It’ll also help the build to stay on track and make everything run as smoothly as possible.

Get recommendations and use review websites to find contractors that are highly regarded in your area. You can search also for builders and check their details and qualifications on the Federation of Master Builders website.

One way you could keep the costs down would be to take on some of the tasks yourself. Of course certain jobs are best left to professionals, such as installing the electrics and water system. But there are other jobs that you could take on yourself, like:

  • Plastering

  • Interior design

  • Decorating.

You could even on the role of project manager on your site. It’s a demanding job, and you have to have time and patience, but it would save you having to pay someone else to oversee construction.

Getting quotes and making payments

When you talk to tradesmen, ask for:

  • A price for the whole job

  • An estimated date of completion for the work required

  • How many workers are needed (anything additional will be priced extra).

But 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 where a builder comes on recommendation, you shouldn’t pay the full amount up front. Pay in instalments as this protects you against poor craftsmanship.

If you can, source materials yourself to cut costs. You’re able to shop around for the best price whereas the builder may be tied to a particular merchant.

Get insurance

Before work starts, you may need to get insurance to protect anyone working on site.

There are lots of specialised site insurance policies available for self-builders. If you’re unsure what you need, speak to an independent financial advisor or insurance broker who can help.

Reclaim your VAT

The purchase of building materials for a self-build project is exempt from VAT. This means 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 it’s definitely worth doing.

HMRC's website explains how to get your money back.

Need to a loan to fund your renovation or property maintenance plans? Compare affordable loans to keep the cost as low as possible.

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