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; request a free guide on NISAs from Hargreaves Lansdown
- 1 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 2 The secret report that helps Israel hide facts
- 3 Is Ebola coming to Britain? UK health officials issue warning to doctors as outbreak fears grow
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000