Tax change lays foundation for self-build boom in UK

Infrastructure levy exemption will make it cheaper for extreme DIYers

Building your own home is a brave move but the step is slowly gaining popularity in the UK. The Government is pushing new measures to make it a more mainstream option and this weekend marks the start of National Self Build week, set up to encourage aspiring homeowners down the DIY path. But is it really a viable option?

We still lag well behind our neighbours – only 10 per cent of the UK's new homes are self-builds, compared with around 50 per cent in other European countries – but this gap could soon close with plans to make self-builders exempt from a tax that used to apply to all buildings over a certain size. Relief on the Community Infrastructure Levy (CIL) will be for homes built or commissioned by individuals planning to live in their home as owner-occupiers. The potential savings would be significant as the charge typically adds 10 to 15 per cent onto build costs.

Self-build projects can take different forms including co-housing schemes, developer-led projects and cheap eco homes. Finding the right plot and wading through the planning process are the first major hurdles but you can get in touch with estate agents and landowners directly, or have a look through online portals such as PrimeLocation and Zoopla. Specialist agencies such as Plotfinder.net and PlotBrowser.com are a big help in finding out what land is available and at what sort of price. You should also look into buying a smaller house on a large plot which is in need of renovation that you can knock down to start again.

"My number one tip for self-builders is to be flexible and willing to take on the ugly duckling – you have to remember that you are often seeing the plots at their worst, but they could be transformed with a really nice house," says Jason Orme, editor of Homebuilding & Renovating.

You will need a sizeable amount of cash to get started, although self-build mortgages are available, typically from building societies lending directly, or through BuildStore (which also lists agents selling plots of land). The number of lenders in this market has shrunk since the credit crunch and those that remain have strict criteria but you can usually borrow up to 75 per cent of the land and 60 per cent of the build costs. Pay outs are in five or six stages and the lender may want to send round a valuer at each stage to assess how much the property is worth before releasing more funds.

You will need to show you have a realistic budget in place, which takes into account all the potential costs involved, from the build and the land, right through to fees for labour and an emergency fund for the not-so-unexpected extras. A project manager will increase your spend but it could appease lenders if they are concerned that you won't finish on time and to budget. It's also important to consider where you will live while the work takes place and how you will finance both homes.

You may find that self-build simply isn't a practical option but you rearranging an existing property instead may turn out to be cheaper and faster than starting from scratch.

But self-build can be surprisingly affordable. There is no VAT to be paid on new builds and the house is likely to be worth much more than it cost to build. Your bills could be cheaper too if you build a more sustainable home with top-notch insulation and energy-efficient features such as heat pumps.

Another clear advantage to self-build is that you can design the house that you want, although think twice about designs that are too quirky or individual as this could be an issue if you want to sell in the future.

When it comes to the build, one hassle-free approach is to use package companies who construct your home from kits, whether timber and oak frame, or traditional brick and block. They usually offer the design, labour, construction and materials as part of a fixed price contract, but you may have to compromise on the design and features and you will be dependent on the skills of their in-house designers. You will also need to make a sizeable upfront payment.

"Limiting your own input invariably means paying for someone else's – this is not a cheap alternative, but it might be cost-effective," says Michael Holmes from The Southern Homebuilding and Renovating Show.

Otherwise, you will need to hire an architect to draw up the plans and other professionals such as a structural engineer and quantity surveyor. Always negotiate over fees and be wary of fees linked to a percentage of the construction cost because it will then be in their interest to keep the overall bill high. Once you're happy with your design you need to submit it for planning permission which takes up to 12 weeks for approval, but this is a good time to line up and get quotes from sub-contractors such as an electrician and plumber. The independent website PlanningPortal.gov.uk offers lots of advice and guidance on how to make this process as simple as possible.

You can employ a main contractor to run the building site for you, which will cost 10-30 per cent on top of labour and materials, depending on the local market. You benefit from their experience, their access to local contractors and discounts on materials that you may not be able to replicate yourself.

"Many self-builders who go down this route view the main contractor's margin as money well spent to avoid the stresses of running a building site day to day," says Mr Holmes.

If you're up to the challenge, you can be your own project manager, but you need to be prepared to deal with everything from deliveries and ordering materials, to paying tradesmen and hiring toilet facilities. Once you own the land you are also liable for any accidents to workers so you will need to arrange insurance. Lenders will usually insist that liability insurance is in place before work begins.

"Don't be seduced by TV programmes that make building projects look easy," says James Greenwood of Stacks Property Search. "Don't think you can mastermind it yourself – surround yourself with a good team including architect, project manager and builders. Ensure you, and everyone on the team, agree as to where responsibilities start and finish."

‘We saved about £30,000 by begging and borrowing from friends and family’

Building a new two-storey home Staines, by the Thames last summer – the wettest on record – was a challenge, but one that Bill Jenkins, 58, a software company director and his wife Angie Jenkins, 55, a school bursar, are glad they took on.

With £50,000 in savings and a £400k mortgage through Build Store and Bath Building Society, the couple spent £250,000 on the build. They approached self-build company Potton for design help and getting planning permission, but they took on a lot of the internal work themselves including plumbing and insulation.

"The largest expense on any build is the labour so the more you can do yourself by begging and borrowing from friends and family, the more you will save. I reckon we saved about £30,000 doing a lot of it," says Bill.

The home, valued at £1.1m, was worth all the pressure Bill adds: "Every night Angie and I walk through our front door, look at each other and say 'we did this' – we absolutely love it and it is our home for life."

'We saved about £30,000 by begging and borrowing from friends and family'

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

    Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

    £50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

    Recruitment Genius: Security Officer

    £16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

    Ashdown Group: Business Analyst - City, London

    £50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss