Self-Build. Thoughts, experience or opinions...?

[greg]

I have recently come to the conclusion that building our own home makes sense. I have no experience in the building "game", but my thought process is as follows:

- England has a shortage of homes so demand for new property is substantial
- as a family we need five bedrooms and in our neck of the woods (like many others) the costs are now prohibitive
- with prospects of somewhat unsteady house prices (and even the slim chance of a true crash) a successful self-build project would yeild a house which should (if budgeted properly) have a value 30-35% above the build cost when completed. So even with a price crash it should be worth more than it cost.
- there now appears to be a range of building and financial solutions tailored for the self-builder to overcome some of the traditional hurdles - such as cachflow and where you actually live whilst building.
- you only pay stamp duty on the land value
- naturally you pay no tax on your capital growth, so if you are 30% up (value versus cost) you have grown your equity considerably with no penalties.

As a person with little or no building experience, a busy working life and a "bunch" (yes that's the collective noun) of young children I find the prospect daunting, but suddenly (last week or so) it all seems to make sense.

As a first build I'm not talking about anything too ambitious (no Grand Designs feature for me). Just something bigger than where we are, and likely to sell at a profit easily in prep for perhaps the next project.

I'm interested to hear your views and experiences - am I being too optimistic?
Cheers
Greg

 

[domfjbrown]

Homes are only in short supply because of buy-to-let/holiday/second homes...

If construction companies reconditioned old offices rather than filling the country with expensive empty ones, and then turned their building talent to building houses instead it'd solve a lot of problems...

How easy is it to get a mortgage on a self-build, by the way? My dad did it in 1960, but he used to work for a bank, which might have helped.

 

[Philip King]

self build in Sweden is very popular and almost expected these days. Saying that land is very easy to come by, something that is not in the UK. This I feel maybe the major sticking point.

The company Scandia Hus is popular over here and has a UK office. They supply flat pack housing, basically you pick the style of house, size, number of rooms etc and they build the frame in pieces then ship it to your home and then erect it. Very simple and bloody quick, something like 4 weeks from foundations to roof and walls.

I would recommend it but, its hard work, more so if you do not know anybody in the building game, you will exceed your budget and if you ever want to sell it you can rule out the Barrett brigade as potential buyers.

 

[Joe]

How easy is it to get a mortgage on a self-build, by the way? My dad did it in 1960, but he used to work for a bank, which might have helped.

It's not (necessarily) difficult to get a mortgage, but self-build mortgages are different, in that the money is released in stages as the building progresses rather than as a lump sum.

Mucho information on self-build at:

http://www.selfbuildit.co.uk/

 

[greg]

Yep that site and buildstore.co.uk have got me minded in the world of self-construction. I was however also looking for anything independent of these associated sites which could tell me whether they have any sinister or problematic commercial affiliations.

Ie. if their content convinces me that a pre-prepared timber frame build is a great idea, but then I find they are affiliated with, say, Potton (potton.co.uk beyond just basic advertising I'd be a little concerned.

I like the idea of the newer breed of mortgages designed for self-build projects - it seems you might actually not have to sell your existing home whilst building your new one.

 

[Joe]

Yep that site and buildstore.co.uk have got me minded in the world of self-construction. I was however also looking for anything independent of these associated sites which could tell me whether they have any sinister or problematic commercial affiliations.

Right you are. My uncle self-built a bungalow a few years back and as far as I know it was relatively problem-free, bar the usual weather-related delays. I'll pick his brains for any relevant information.

 

[amazingtrade]

I assume that you either have to a builder or pay somebody else to self build the home? I would imagine it would be suspect to all the usual planning and health and safety laws?

 

[michaelab]

Here's a link to a "self build" system I've always liked the look of:

http://www.m-house.org/

...although it's more of a pre-fab house than an actual "build". Way too small for what greg's looking for but pretty cool IMO.

Michael.

 

[auric]

Bring on all the prefabs and self build property porn you can manage - I can take it!

 

[greg]

I assume that you either have to a builder or pay somebody else to self build the home? I would imagine it would be suspect to all the usual planning and health and safety laws?

All depends.

a) There are plots of land for sale with no hint of planning permission, but which might over time be within the scope for application (eg. the area becomes subject to development due to demand).
b) There are plots with planning in principle - ie. you might well get permission for the house you want to build, but where you apply for a five bed three storey house, the planning office may limit it to a three bed bungalow.
c) Then there are plots with full planning permission for a particular type of dwelling.

As you can expect the price difference between a), b) and c) can be massive.

Also where I say self-build I'm not talking about building it myself. But you'd be surprised how specific building costs can be - eg. approx. £796 per sq. metre of floor space for a five bedroom, brick/block built, two storey, natural slate roof house with underfloor heating up and down. Whether to employ a project manager is another question though.

 

[PBirkett]

I cant understand the housing shortage really... if they revamped some areas then there probably would not be a shortage. A few years ago, it was rumoured that 1/5 of all houses in Newcastle were boarded up / vacant... not sure what that figure is nowadays. I bet a lot of other cities are the same.

 

[amazingtrade]

I cant understand the housing shortage really... if they revamped some areas then there probably would not be a shortage. A few years ago, it was rumoured that 1/5 of all houses in Newcastle were boarded up / vacant... not sure what that figure is nowadays. I bet a lot of other cities are the same.

Parts of Salford were like this but they have knocked them down, apparantly Gainsborugh in the north Lincs is the same.

The problem is nobody wants to live in these areas, you can pull them down but the area will still have a bad reputation.

However there some sucess stories such as Hulme in Manchester its now quite a deserable place to live. This area used to be adandoned.

 

[amazingtrade]

All depends.

a) There are plots of land for sale with no hint of planning permission, but which might over time be within the scope for application (eg. the area becomes subject to development due to demand).
b) There are plots with planning in principle - ie. you might well get permission for the house you want to build, but where you apply for a five bed three storey house, the planning office may limit it to a three bed bungalow.
c) Then there are plots with full planning permission for a particular type of dwelling.

As you can expect the price difference between a), b) and c) can be massive.

Also where I say self-build I'm not talking about building it myself. But you'd be surprised how specific building costs can be - eg. approx. £796 per sq. metre of floor space for a five bedroom, brick/block built, two storey, natural slate roof house with underfloor heating up and down. Whether to employ a project manager is another question though.

I quite like the idea of this, but I will probably have to find some small brown field land it might not be that easy.

I assume that figure is total building costs, £796 per sq metre seems very very steep surely it would be cheaper just to buy an already build house?

As for project manager I think this is somthing I could do myself providing I had the time.

I know I can't afford a normal house providing I get the a decent job the very most I will be able to borrow is about £100k.

 

[Hex Spurt]

Are you able to get the VAT back on new build projects. I have a hazy recollection that this was one of the big advantages over a refurbishment project.

 

[amazingtrade]

I suppose some of the work I could do myself some of the wiring, some of the joinery such as the kicthen, I would need a builder to build the actual house though and a a plumber and electrician to the bits I can't do (which is probably most of it!).

Its somthing I might have to think about withinthe next few years becuase I should be in a position to get a decent mortage in 5 years time.

How much would it cost to build a small 2 bed house exluding land and project manager but including labour costs of the build roughly? I have no idea but I would guess about £50k is right?

 

[pnm]

The principle reason for short supply of new houses is the Planning bottleneck. I think there is demand for x million homes but only 110k built per year.

VAT is a major issue as new residential is zero rated so unless you are VAT registered you'll get substantial leakage of cost.

As for a 2 bed house which would typically be 60-70 sq m you can assume a build cost of £55-65k.

Hope that helps

 

[Graham C]

All depends.

a) There are plots of land for sale with no hint of planning permission, but which might over time be within the scope for application (eg. the area becomes subject to development due to demand).
b) There are plots with planning in principle - ie. you might well get permission for the house you want to build, but where you apply for a five bed three storey house, the planning office may limit it to a three bed bungalow.
c) Then there are plots with full planning permission for a particular type of dwelling.

As you can expect the price difference between a), b) and c) can be massive.

Also where I say self-build I'm not talking about building it myself. But you'd be surprised how specific building costs can be - eg. approx. £796 per sq. metre of floor space for a five bedroom, brick/block built, two storey, natural slate roof house with underfloor heating up and down. Whether to employ a project manager is another question though.

I have thought about it too, for years. As you say the land costs [with planning] are grim. I don't think any UK govt wants to see planning laws relaxed, otherwise 90% of UK farmers would sell up and become Michael B's neighbours. We must be one of the most over-regulated countries generally. If the govt really wanted to help, they could choose a good town sized piece of prime land, plan in the infrastructure, business parks etc then sell plots [no more than 1 per person, owner occupier covenant etc]. It could be a DIY 'Garden Newtown'

See if these help:

http://www.property.org.uk/
http://www.slecladding.co.uk/composite.htm
http://cofe.anglican.org/about/diocesesparishes/rcsale/
http://www.perfectplot.co.uk/main.asp
http://www.homeforlife.co.uk/

There are also lots of plots and land for sale websites

 

[greg]

VAT is a major issue as new residential is zero rated so unless you are VAT registered you'll get substantial leakage of cost.

If I understand things correctly, VAT can be reclaimed on all materials (not sure about labour but I expect that is included) once the project is complete. The only restrictions are - one claim only (so to got to be right first time) and has to be submitted within three months of completion. Maybe I misunderstood your comments?

 

[auric]

PM failed

Greg,
I just tried to send you a PM but your inbox is full, can you please clear some space and I'll try again sometime soon.

Auric

 

[amazingtrade]

I assume its much easier to get planning permison on brown field land rather than green field?