Self-building has hit the headlines a great deal over the past 12 months. Not only because the Government has taken steps to make self-building more achievable in terms of finding land, but because there are more lenders offering specialist self-build funding too. So it makes sense that the number of people completing their own bespoke home is on the rise – and there’s no reason why you can’t be one of them.
In fact, there is no one demographic that self-builders fall into; there’s a mix of younger people looking to get on the housing ladder, families in need of more room and retirees wanting to downsize. There is no set budget requirement either – a great benefit of self-building is having the opportunity to create a home that perfectly suits your lifestyle, be it a home with a low running cost, something that’s sustainable and eco-friendly or a house that’s built to a strict low budget.
Hands on or off?
Don’t be put off self-building by thinking you have to construct every element of the house yourself. Self-building actually covers a wide variety of routes to a new home – this obviously includes the DIY route, but also encompasses hiring the specialists to do the work for you and even working alongside a package company for a turnkey solution. How involved you decide to be depends on your budget, skills and time available.
If you are less experienced or just don’t have time to spare, it doesn’t mean that you can’t successfully tackle a project. You just have to make a serious plan of what you are happy to do, and what is out of your comfort zone – if there are things you don’t want to take on, you’ll be able to find a professional to help you, whatever the task may be. If you do want a level of involvement, but don’t have any construction-related skills, maybe you could consider taking on the role of project manager. It is a well-trodden route and something that many people enjoy doing – it comprises a variety of tasks and you need to be highly organised. You can find out all about what the job entails by taking a specialist course at the NSBRC in Swindon, which runs at various points throughout the year.
Is self-build affordable?
One of the reasons that so many people are drawn to self-building is because it is cost-efficient. But, thanks to the glamorous TV shows that we’ve all seen, it has wrongly been given the reputation of being all about big budgets. In reality, the opposite is true.
To start with, if you were to buy a home direct from the residential market for more than £250,000 you would have to pay a hefty 5% stamp duty. The tax is only chargeable on the cost of the land, so if self-builders purchase a plot that’s valued under the £125,000 threshold (which many are), you can avoid paying this fee. Another saving is on labour, as the costs for new-build homes are zero-rated and you can also reclaim the VAT charged on many building materials after completion.
In addition, you are in charge of where to spend and where to save on your project, so if you run a tight ship, you could get even more value for money. Be clever in your decisions – invest in what matters, such as the structure and sustainability, and make savings on non-permanent elements. For example, investing in good quality insulation and an efficient heating system will mean your home’s bills will remain low, as well as being attractive to future buyers should you sell in the future.
Most people simply want to create a good quality home for a sensible price, and you can do this too. In fact, if you budget well you could expect your bespoke house to be worth 20% more than your outlay costs if you put it on the market. This is dependent on factors such as location and overall quality, but you can certainly expect to pay far less than you would by purchasing a like-for-like developer-built dwelling.
Tailored financial products
Most self-builders pay for their projects with the help of a specialist mortgage. The great news is that more and more lenders are releasing relevant products – in the last few months alone, BuildStore has worked with The Mansfield Building Society, The Newcastle Building Society and Staffordshire Railway Building Society on new mortgage offerings. In many cases it is possible to borrow up to 85% of the cost of a plot and 80% of the cost of a build through products such as BuildStore’s Accelerator advance stage payment mortgages.
The stage payment system means that lenders allow you to draw down funds at different periods in your project – so wages can be transferred to tradespeople and materials purchased at the right time. Typically, payments are made in arrears of the building stages, but with Accelerator mortgages you can draw funds prior to completion of each stage – which further eases cash flow requirements.