26 Feb 2019 By WengYee Loke
What happens when you just can’t find the perfect ‘forever home’? Maybe you’ve looked at a dozen houses there is something not quite right with each one.
Now you think? Well, if I can’t buy my perfect home, why not build it?
It is forecasted that the value of self build and custom build market will grow by 41% by 2020. Source
But of course that doesn’t mean that every person will be building their own home. Here in the UK, the self-build community is a relatively small one. With about 10% of houses in the UK being a self-build. This is in comparison to most of Europe (over 50%) or the USA (around 45%). Source
No surprise that money should be your first consideration.
Ask yourself honestly, how much do you have to spend?
Are you looking to build a tiny house? Or a large custom home with a basement cinema. For every new feature you want, the cost will go up. There is no ‘motivated seller’ if you are building your own home. You won’t be able to negotiate the cost down from a seller who needs the sale to go through as quickly as possible. Don’t forget to account for delays or unexpected costs (all part and parcel of housing construction). It would be prudent to have at a minimum a 10% buffer in your budget.
If you need a self-build mortgage, you will also need to take into account the monthly mortgage repayments during the build. Self-build mortgages/development finance will have higher interest rates than a typical residential mortgage. This is due to the increased risk the lender takes with the project.
Now that you’ve established the basic build costs, the next question is how? If you are a builder yourself then DIY it is! For those less inclined to laying a brick or plastering, you will need to know how to manage the build.
Building a house is not a quick process. There will many site visits needed to make sure that the process is going smoothly. So if you can’t be on-site constantly, then you will need the help of someone who can.
Hiring a project manager will also increase the cost so do take that into consideration. While you may be inclined to manage it yourself in order to keep the costs down, remember this quote.
If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.
Last but not least is location, location, location. Self-build plots are not as common so be prepared to do a little more hunting. Auctions are a good place to start. Whether you are looking to buy land and work with a planning consultant/architect to get planning permission from the council or a of land with planning permission already granted; it is quite likely that they will be sold via auction.
There will of course be a difference in the pricing of land that has planning and land that doesn’t. Land with planning may cost more. The seller will want to be compensated for the time and effort they put into seeking planning. While land without planning could appear cheaper, make sure you read the legal pack carefully. There is occasionally an overage clause. This entitles the seller to additional payments from the buyer when certain conditions are met. More often when there is a change of use to the piece of land i.e. from agriculture use to residential.
Then continue down the self-build path! It would be worth investing the time and effort into making your ideal home a reality.
Keep an eye on our site for land/self-build opportunities:
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