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Property: The pros and cons of building your own home

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Property: The pros and cons of building your own home
All new homes must meet building regulations so a building inspector will visit the site at key points to ensure everything is being done safely and complies with planning regulations. Photo: Getty

With house prices skyrocketing and properties being snapped up quickly, many people are deciding to build their own home. 

According to the UK government, about 13,000 houses a year are self-builds — built to the specifications of the person who’ll actually live there. But what does a self-build actually involve? 

We spoke to two people who’ve taken on the challenge themselves.

Finding a plot

The first thing you need to do is to find a plot. There are plenty of online resources, such as Plotfinder.net and Plotsearch, but word of mouth and local auctions are also ways to find the place to build your home. 

Before buying a plot, make sure you get expert advice on whether planning will be granted (if it isn’t in place already), and whether there are any access issues or covenants that would making building difficult or even impossible.

It might be that the plot already has a house on it. Pip Tennant built her seven-bedroom, Georgian-style forever home by knocking down an old bungalow. 

"We had an eye on the market for a good couple of years and eventually this plot came up on Rightmove. It had a large 1950s house with a garage attached so it was perfect for knocking down. 

"The house was so ugly all the neighbours were thrilled it was going, and the large square footage meant we could get what we wanted."

Read more: Gas and electricity bills: Will an energy smart meter actually save you money?

Amy Phillips bought a five-bedroom 1930s house in Sevenoaks and originally planned to do an extension.

"We never actually intended to knock it down," she said. "Unfortunately, the designs were filled with compromises and cost a lot more than we expected." 

Instead, she is now building a larger, modern home with lots of open-plan living space.

Finances

As with traditional house buying, you’ll need a sizeable deposit, but, unless you’re a cash buyer, you’ll also require a self-build mortgage. 

Unlike standard mortgages which release money on completion, a self-build mortgage releases payments across the build to help manage cashflow. 

Few high street banks offer this, and you’ll probably need to find a specialist advisor. This more complicated finance situation means that first-time buyers rarely do self-builds.

Setting a budget can be difficult, but on average you’ll pay between £1,500 ($1,998) and £3,000 per square metre. 

Read more: How much can I borrow on a mortgage based on my salary?

Add in the cost of your plot — often up to 30% of your total budget — and a contingency plan of 10% for unexpected extras. 

"Don't forget to plan for all the various surveys/reports that you need up-front," said Phillips. "We had to get bat surveys, tree surveys, soil surveys, heritage reports, the list goes on!"

Getting a team together

As soon as contracts on your plot are exchanged, make sure you have self-build insurance to protect yourself and your contractors. 

You’ll need an architect, a builder and, if you don’t want to do it yourself, a project manager. 

Get personal recommendations, use review websites to find contractors and find several quotes. 

"Consider a quantity surveyor to help with pricing your build. They can also help you negotiate a fair price and draw up a contract with your builder," said Phillips.

"Get a good architect who charges for the project, not per hour. This allowed us to change our minds or explore new ideas, as many times as we liked," said Tennant. 

"Find the right builder. If you have complete faith in your builders, as we did, then the project is positively enjoyable."

The build

Building a house usually takes between 40 weeks to a year, but be prepared for setbacks. 

Tennant’s build was scheduled to take a year but stretched to 18 months. "We were hit with bad winter conditions (flint and mortar can only be laid in temperatures above three and five degrees respectively) and then COVID." 

All new homes must meet building regulations so a building inspector will visit the site at key points to ensure everything is being done safely and complies with planning regulations.

Read more: Five ways to save on your council tax

One of the benefits of building your own home is that you can reclaim the VAT on materials and labour. "The 20% saving on VAT meant that the cost of a new-build was only slightly more than a large renovation and extension," said Phillips.

Even with the saving on VAT, sticking to a budget isn’t easy. "You shouldn't scrimp on the skeleton of the house — those things can't be changed — but if you're running out of money, the softer things can ultimately be changed at a later date," advises Tennant.

The average profit on a well-managed self-build project is an impressive 25%, but is it worth the effort? While Phillips admits building your own home is "very time-consuming and also quite overwhelming with so many decisions to make", she has no regrets. 

"It's a fantastic feeling watching your creation come to life," she said.

Watch: UK property: What is shared ownership?

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