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The number of people building their own home is at an all time high. But why self build and what's involved?
Q. What's the attraction of self building?
A. A recent survey found that self builders want an individual home, designed to their own tastes, lifestyle and requirements. Others build their own home because they see it as a way of getting a more interesting design and a better quality of finish and specification than is otherwise available. Some people may specifically want to incorporate energy saving features, a basement, a central cleaning system, underfloor heating, or a gym or home office. A self build home is bespoke to YOU.
Q. Do you need DIY Skills?
A. No; common sense, motivation and project management skills are far more important. In fact, some lenders actually stipulate that the house must not be built on a DIY basis.
Q. What are the first steps to building your own home?
A. Best advice is to invest time and energy into finding out everything that is involved, working out your budget, and thinking through exactly what you want. The more you plan, the better prepared you are.
Q. How do I finance the project?
A. When you have broadly decided to go ahead, talk to the lenders at an early stage about your plans. In essence a mortgage for self-build is the same as any other except that, instead of advancing the funds all in one go, they are released in retrospective instalments. These instalments (known as stage payments) correspond to various stages of construction, and payment is made once a particular stage is completed.
When construction reaches the first stage, your bank or building society will send a valuer to inspect the site and confirm that the building has advanced sufficiently for the first instalment to be released. From then on, as each stage of construction is completed the valuer will re-inspect on your lender's behalf and confirm that progress is satisfactory for release of the next stage payment. In some cases your lender will ask your warranty provider to carry out the valuation instead. Most lenders are flexible on the way the construction work is carried out, either by a builder, sub-contractor or by yourself. All the lenders insist that the work is covered by a warranty or progress certificate issued by a professional overseeing the project, such as a surveyor, engineer or architect.
Q. How do you find land?
A. For self builders finding a plot of land is usually the most taxing stage of building a new home. Good sources are through estate agents, specialist and land finding agencies, local newspapers, and of course the internet. Builders quite often sell off individual plots, and currently, public utility companies, local councils, the church, and other land-owning bodies are selling off small sites. You could also try driving around in areas where you would like to live, and seeing for yourself whether there are likely to be any opportunities - e.g. large side gardens, or semi-derelict properties in need of replacement. Word of mouth can also point you in the right direction.
Q. What should you look for in particular?
A. First, land must have at least outline planning permission - otherwise it is not a building plot. Look at the date of the permission, as most outline permissions expire after three years. Almost make an offer to buy a plot of land subject to getting the further, detailed planning consent, for the house that you want to build. Finally, make an offer to buy subject to a satisfactory ground survey; such a survey will also tell you what kind of foundations will be required for your house, and what these will cost.
Q. Who will design my house?
A. You can get an architect, or a specialist kit package company, or you can pretty well design it yourself and then go to an architectural technologist to make your sketches work and conform to building control requirements.
Q. How can you guard against your self build project going wrong?
A. Get your construction covered by some form of structural guarantee - this will be a lender's requirement, but it's also good for your peace of mind. Companies providing warranties include Build Zone, Premier Guarantee, Evolution and NHBC, or an inspecting architect or surveyor with professional indemnity, are among the options. Site insurances are also essential so that you can claim if materials are lost or damaged during the build, or if there's an expensive third party claim against you because of an accident on site. Very strongly advised, too, is a self build legal indemnity insurance policy - which will allow you to take court action against, for example, a negligent builder or architect.
Q. Do things go wrong?
A. Very rarely - careful pre-planning really is the key.
Q. What is the VAT situation?
A. There is currently no VAT to pay on labour or materials when you build a new house. On 'supply and fix' contracts, e.g. where a builder supplies materials and labour, you will not be charged VAT. If you are running your own site, hiring your own labour and buying your own materials, you will not pay VAT on any labour charges. You will pay it on materials at the point of purchase, but you can re-claim this within three months of finishing your build, using the special Notice 719 scheme. Many self builders claim thousands of pounds back from Customs & Excise at the end of their project - enough to carpet and decorate the house, or take a well earned holiday!
Top tips for success?
Always build a financial safety net into your budget - about 10 per cent of construction costs is a sensible contingency. Monitor the building costs constantly to keep within budget. Think competitively - for example, go to two or three architects before deciding which one is on your wavelength and will agree to design you a house that can be built within your budget. Always approach two or three builders, and never take on one without checking his customer references and inspecting his previous work.