30 Mar 2017

First-time self-builder discusses how he financed his development

Architect and first-time self-builder, Damon Ball, has created a picturesque new home in the Vale of White Horse. Here, we uncover the ins and outs of how he budgeted and financed the development.

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As an architect, Damon Ball of A’Bear & Ball Architects knew the ins and outs of managing a self-build before he embarked on the process of creating his own home. After spending time researching plots in the area he wanted to live in, he found a site on RightMove that was ripe for development.

Although the land came with planning permission in place, Damon knew he would be able to easily alter the plans to suit his requirements. The resultant home is bright and airy, and a contemporary take on a traditional stone cottage. But design and detail aside, there was much careful planning and preparation to do to get the project successfully through to completion. Here, we chat to Damon on the behind the scenes details that took his project successfully through to completion.

How did you finance the initial purchase?

We were on holiday when we saw the plot for sale. We moved really quickly and put an offer in before our house was even on the market – the plot cost £146,000. Our offer was accepted and we knew we had to move quickly to ensure we wouldn’t get gazumped. As soon as we got home, we put our house on the market. We didn’t have equity elsewhere so were reliant on the sale to fund the early stages of the project and secure the land. Luckily, our house sold in just two or three days for the full asking price. We contacted the vendor and then put the wheels in motion for the rest of the build.

What were the next steps?

There was a lot to arrange after this point. Firstly, although the land already had DPP in place, it wasn’t the house we wanted to build. As an architect, I know that plans can be amended – and this is something I would highlight to other self-builders. Don’t be put off land purchase just because the approved design doesn’t suit your style. The hard part is getting permission to build a residential dwelling, amending the details is a much easier process.

With our new design in place, the next thing we needed to do was to look at our budget and secure finance. As an architect, I have experience in project costings and know the costs to attribute to each stage – obviously there is always variation until you have fixed quotes from tradespeople and know your material costs. We had a strict build budget of just £1000 per m².

In terms of finding finance, we started by doing a lot of internet research and talking to some of our local high-street mortgage advisors. Everyone that we spoke to told us that we would have to seek a specialist lender in the field, and BuildStore was mentioned to us on more than one occasion. We were told that most other advisors didn’t have access the sort of product we would need.

Luckily for us, the National Self Build and Renovation Centre is close to us in Swindon, and there is a BuildStore team of advisors based there, so we went along for an initial discussion. They discussed the stage payment process with us and the different building societies that would be suitable to fund our project.

Which building society did you go with, and how did the stage payments work?

BuildStore helped us to search the best way to fund the project – they take into consideration the equity we had, what we wanted to use it on, how much to put down as a deposit, and so on, and then find the best package to suit us. They gave us a list of the most suited lenders and we then chose to go with Newcastle Building Society through BuildStore as that was the best rate at the time.

As with any mortgage, it took a while to get the offer in principle confirmed – during the waiting time there were various surveys and inspections to be done. It wasn’t a straightforward process, but BuildStore did most of the hard work for us. We had to complete works to foundations and DPC – which cost about £25,000 – and from there onwards we could draw down funds in stages to pay for materials, tradesmen and so on.

Who organised and oversaw your project?

I was the project manager and organised the schedule of people on site. During the build we were living around 40 minutes away from site, and I was still working full-time too – which again was a certain distance from site.

I would start the day off early, visit the site, do a full day’s work and then return to site at the end of the day – and spend a few hours there. I ended up getting home really late, and then off to bed for another early start the next day! This type of management won’t necessarily suit everyone, but it was right for us at the time. I wanted to be hands on and I have project managed as an architect on other schemes, so I knew what I was letting myself in for. However, all things considered, I look back and think ‘how did I manage that?!’

Were there any other essential elements you had to consider?

As all self-builders do, we had to get a special 10-year structural warranty for our home, which is separate from our mortgage, but was supplied via Self-Build Zone through BuildStore. You’ll need this in order for your mortgage supplier to lend. It gives a bit of peace of mind to any future buyers as well.

For the warranty, an approved inspector came to site to review the various build stages to sign off the quality of the build. This was all tied in to the stage surveys needed for the mortgage so it didn’t feel like much of a hassle. The final thing that self-builders will want to know is about financing your home after the build is complete. You won’t want to, or need to, stay on the initial self-build mortgage product once the build has completed. We contacted Newcastle and were able to arrange a new, better-suited mortgage with them. I would always recommend going back to your mortgage supplier to see if they can keep you as a client, with a rate to suit your circumstances.

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