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Against today’s backdrop of tumbling house prices and restricted mortgage funding, there has never been a better time to build your own home.
The self-build sector across the UK is taking full advantage of the current property market uncertainty and negative sentiment by making the most of the numerous benefits which can be gained in the present climate, over and above those already on offer.
One of the big challenges for people building their own home in recent years has been finding the right piece of land, in the right location and at the right price.
The evidence at present shows this is becoming less of an issue, with many builders and developers actively selling of ground and plots, in many cases at substantial discounts, in order to recover much needed corporate revenue to ensure their stability during this difficult trading period.
The consequences of this are the market has to some extent moved in favour of the buyer and those individuals looking to purchase land to build on are now finding it more likely they will not just obtain their preferred plot, but also at a more attractive price.
Stamp Duty and VAT
The majority of self-builders will also avoid paying Stamp Duty as the tax is only levied on the cost of the land and not the value of the completed property. As such a great many plots will fall under the £125,000 threshold, after which between 1% and 4% is levied depending on the purchase price.
This is a far cry from the mainstream property market where the two higher tax bands have become an unpleasant but everyday reality for a lot of buyers.
Another unpleasant tax which those building their own home will avoid is VAT. All of the VAT charged on the project can be claimed back and there are excellent guidance notes and forms to download from the HMCE website, specifically designed for self-builders. The VAT paid is refunded and could run to many thousands of pounds in all but the smallest of projects.
In the current climate there is understandably a lot of consternation amongst home owners over the value of their property and those looking to move up the ladder are nervous about buying into what is currently a depreciating asset, in most parts of the country.
However in the self build market, the completed property is normally valued at between 20% and 30% more than the total build cost, including the cost of the land.
This means self builders are investing in an appreciating asset and immediately create substantial equity in their property which will both protect and serve them well in the future.
Self Build Mortgages
Mortgage lenders are well aware of the extra security this cushion provides and even in the present climate specifically designed self-build mortgages to cover both land purchase and build costs are readily available for borrowers. This type of mortgage is also structured such that the customer can remain in their own home for the entire duration of the build.
The present environment in the construction sector also means that self builders are seeing prices move in their favour when it comes to building and labour costs. In the face of stiffer competition, tradesmen are having to price themselves more keenly to attract business and this will further help drive down the overall costs of a self build project.
Although the lure of such savings is undoubtedly attractive, many potential self builders continue to be anxious over the practicalities of building their own home.
The very name self-build is slightly misleading, as the majority of people choose to oversee the project, selecting from one of the four main options available to them which will suit their own circumstances best. They can elect to have a builder carry out the entire project on a turnkey basis, project manage themselves, contract in a third party project manager or in rare instances, organise and carry out the works themselves.
Certainly there is no need for customers to be worried about their own abilities when it comes to the practicalities of designing and building their home. Self-builders come from all walks of life and range from single people to couples, families and those looking to retire in comfort and most actually prefer to take a back seat for the majority of their project.
Self Build Made Easy
Whatever they decide, timber frame construction is by far and away the most popular choice for self builders in Scotland and this is quickly becoming mirrored across the rest of the UK. Companies such as Scotframe, who specialise in providing a complete timber frame package can support the customer with a “one stop shop” thereby making life a whole lot easier for those setting out to build their own home.
Manufacturers like Scotframe will also work closely with the customer and their builder or agents on technical and production matters to ensure the building complies fully with current building regulations. This is especially important where the energy efficiency and thermal engineering of the structure is concerned and companies such as Scotframe are authorised to issue the now statutory Energy Performance Certificate (EPC) for the building.
Taking in to account the healthy savings which can be found on land and build costs at present, together with highly sophisticated services offered by timber frame package companies such as Scotframe, there has never been a better time for people to build their own home.