So you’re thinking about self-building. Congratulations! This is an exciting opportunity for you to live in a way that’s more socially and environmentally aware. Now to that million-dollar question: how much is this all going to cost?
Whether self-build is financially viable is likely to be one of the first things you ask yourself. If you feel daunted by the thought of grappling with budget plans, don’t panic – you’re not alone! For many this is one of the most challenging hurdles to overcome. But by taking time at the start of your project to put together a strong budget plan, you’ll smooth the way for yourself further down the line. Let’s think about some of the key factors you’ll need to consider…
One of your first steps will be purchasing a plot. Finding your ideal site is an exciting stage as it means you can start visualising the finished property and life in your new home. But finding land suitable for development in the UK is – more often than not – both challenging and costly. More popular areas are usually highly developed and plots can be affected by planning restrictions. Plus they’re constantly being sniffed out by large-scale developers. When considering a purchase, be on the look-out for hidden legal and financial issues. These might relate to missing deeds, access rights or planning conditions, which can all affect your willingness and ability to purchase.
But it’s not all bad news. On 15 April 2013, the Government announced they propose to exempt self-builders from the Community Infrastructure Levy beginning in the summer of 2013. The tax typically adds a hefty 10 to 15% onto building costs, so the move represents a significant step in favour of self-builders. With only 10% of the UK’s new homes being self-builds, we fall far behind our European neighbours. But it seems this is down more to the complexity and expense of self-building in the UK rather than lack of interest – events like this year’s first National Self Build Week reflect a deep and widespread motivation for self-build across the UK. Let’s hope that dropping this tax encourages more inspiring, independent green builds to sprout up at home!
Self-builds generally save 10 to 15% on the purchase of an equivalent property, but it’s wise to reserve that saving in case of unforeseen expenses – a healthy contingency of at least 10% of costs is recommended. Those costs will vary enormously from project to project and depend on factors such as the materials you choose, how much of the building work you can do yourself and how quickly the build will progress. Developing your haggling skills is worthwhile: comparing prices and negotiating with suppliers and trades people can make a real difference to your budget.
Choosing the right mortgage provider is another essential part of your budgeting plan. Take time to look beyond interest rates – you want a lender who understands and cares about your project, and can offer genuine expertise in self-build lending. Some mortgages might seem like a great deal on the surface but are less desirable when you get down to the nitty-gritty of the small print. Check out how much your lender will charge for something like a photocopy of your deeds, a transfer of equity or a change to your repayment method.
When budgeting, it’s important to take a long-term view – be mindful that the choices you make now will affect your finances over the lifetime of the completed build. An energy efficient new home built with sustainable materials isn’t just better for the environment; it’s good for your wallet too. By considering factors like insulation, renewable energy sources and heat recovery systems, you can reap the benefits later on in the form of lower utility bills.
There are further financial incentives available for choosing to go green – for example, Ecology’s C-Change scheme rewards members who prioritise energy efficiency. If you’re upgrading your existing home the Government’s Green Deal could help you to cover initial installation costs. The scheme allows homeowners to install energy saving measures with no upfront costs; instead, the cost can be repaid through your energy bills.
You can’t be too thorough when it comes to putting together a budget plan: draw it up, inspect it, pull it apart and re-sketch until you’re confident that your planning is watertight. And just remember, those lamp-lit, coffee-fuelled hours spent comparing quotes and tweaking spreadsheets will be worth it when you’re moving into a beautiful, sustainable new home.