Many of us dream of building our own home, and while it is 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.
Taking on a self build project is a big task that will take months, possibly years, to complete.
No matter how moderate your plans, it will be an expensive and stressful undertaking, so it is not something that should ever be entered into lightly.
Most self builds, if managed properly, should be worth considerably more than the construction costs. If all goes to plan this means you 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, like 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.
Before you start, assess your local area to make sure that your dream property is not already built and waiting for you.
If you do find one that is a close match, you need to work out whether you would be able to build a replica for less than it would cost to purchase and renovate the existing property.
If you could build your own version for a fraction of the asking price, doing so is definitely worth considering if you are up to the challenge.
The costs involved in a self-build project can easily spiral out of control if you fail to be realistic from the word go. Make sure you consider the following:
Research the likely cost of land, architect fees, builders, materials, fixtures, fittings and everything else you will need when you build a property from scratch.
Look at your finances and decide whether you can cope with such a huge financial commitment.
Consider ongoing costs, such as if you will be able to afford to pay rent or a mortgage while working on the construction.
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 are able to pay for land, labour and materials as your build progresses.
It is also common for self build mortgages to vary the LTV you are able to borrow. For example you may be offered 75% of the cost of land but 85% of the projected building cost.
Self build mortgages are often priced slightly higher than standard mortgages.
You will also need a sizeable deposit up front before any lender will be willing to offer you a self build mortgage.
Finding a plot of land for your new home is the first and often the most crucial decision you need to make.
Your choice of land will be limited by your budget and the land available, so you need to extend your search as widely as possible.
Speak to local and online estate agents, look at property websites and check land auctions as a starting point.
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 are open to offers.
It is also worth contacting your local council and checking the Homes & Communities Agency website to see whether they have any suitable plots for sale.
There is 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 POLICE.UK to investigate crime levels
Consider how you will get to and from work, and 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 schools' catchment areas when you decide where to buy land
There is little benefit to having a sizeable plot of land if you cannot access it.
Before buying a property, check that there is 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.
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 will give you an idea of whether the land is worth the asking price and help you to establish whether you are likely to make a profit if you sell it at a later date.
Without planning permission, you have no legal right to start construction, meaning your council could order the destruction of any work at your own cost.
Therefore, it makes sense to check planning permission rigorously and to not actually buy a plot of land until suitable planning permission has been granted.
There are two levels of 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 have yet to be agreed.
If a plot has outline planning permission, you will 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.
This is where a full construction proposal has been agreed in detail, for a specific build such as a three bedroom house, or one bedroom bungalow.
If your plans do not 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 application online.
When you find a plot that ticks all the boxes you will need to put in an offer.
Treat the asking price of a plot as a starting point for negotiation and offer an amount you are happy to pay.
Do not be afraid to go in with a low price first of all (especially if you have had a mortgage approved in principle), as you can always put in a second offer if your first one is not accepted.
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.
You do not have to pay any stamp duty if you purchase a plot for residential use for less than £125,000
2% stamp duty is charged on the next £125,000
5% is charged on the next £675,000
10% stamp duty on the next £575,000
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. Consider the following:
How many bedrooms and bathrooms will you need?
Do you need a large garden or are you looking at building an urban sanctuary?
How large should each room be? Would you be happy with a smaller kitchen in exchange for a larger living room?
Getting a good architect can be the key to realising your idea of your perfect home.
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.
They will keep you compliant with building regulations and planning permission
Ensure your house is structurally sound
Tell you what is affordable within your budget
Incorporate unique features that are unavailable in a standard construction
Advise on construction practices and materials
Manage the build project should you wish
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.
Every time you have to hire someone to work for you, you will pay a premium for their expertise, so it is 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.
When faced with the prospect of having to hire people to work on a self build project, many people are fearful of 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 that you can take on yourself, such as:
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.
Before work can begin, you may need to take out 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.
Speak to other people who have used construction staff to seek recommendations, or 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.
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 craftsmanship.
Finally, where possible, you should source materials yourself to cut costs (as you are able to shop around for the best price whereas the builder may be tied to a particular merchant).
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 your 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.
The purchase of building materials for a self build project is exempt from VAT, so you will 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 is definitely worth doing.
Need to a loan to fund your renovation or property maintenance plans? Compare affordable loans to keep the cost as low as possible.